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Rise in remortgagors cutting costs and looking for security

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  • 03/03/2017
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Rise in remortgagors cutting costs and looking for security
Borrowers are remortgaging at the fastest rate in eight years and seeking out both longer term fixed rates and mortgage advisers to help them get the best deal.

 

Conveyancer LMS confirmed seven out of ten remortgagors or 69% of consumers consulted a broker in January, up from 58% in December.

Remortgaging is becoming more frequent at once every four years since January 2011 when the average was six years and five months.

Activity also accelerated at the turn of the year, with overall remortgaging activity rising 10% between December and January, from 27,700 to 30,439. The value of remortgage transactions also rose month-on-month by 7% but suffered an annual fall of 15%, from £5.8bn in January 2016 to £4.9bn in January 2017.

The popularity of five-year fixed rates rose at the start of the New Year, with the percentage of remortgagors with a fixed five-year mortgage increasing four-fold to 29% as two-year fixed rates fell from grace.

Andy Knee, chief executive of LMS said: “With inflation on the rise – rising to 1.8% in January, the highest since June 2014 – and both the Budget and Article 50 mere months away, remortgagors took advantage of January’s favourable conditions and record-low rates to guard against potential upsets in the near future.

He added: “Almost half of remortgagors in January now expect interest rates to increase in the next year so homeowners would be smart to remortgage now – before it’s too late.”

Price is still the key driver of mortgage choice with 54% choosing a mortgage with this in mind, where 27% of consumers said they chose their lender because a broker recommended that provider.

Four in five remortgaged to take advantage of low rates, while nearly a quarter remortgaged to release equity in order to make home improvements.

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