With increasingly competitive rates available, borrowers who are currently sitting on their lender’s standard variable rate (SVR) have growing motivation to remortgage and lock in to a better deal, Moneyfacts said.
However, the report revealed that the rates are an increase on March 2018 when they stood at 2.39%. In November 2018 they stood at 2.53%.
These figures follow the latest borrowing statistics from the Bank of England revealing that remortgage approvals were up from 48,900 in November to 50,400 December 2018, as borrowers seek peace of mind amid economic uncertainty connected to Brexit.
Lenders could slow aggressive pricing
Rachel Springall, spokesperson at Moneyfacts, said remortgage customers who locked into a two-year fixed deal at the end of 2018 may have missed out on a cheaper deal.
She pointed out that those who waited may now save even more by moving off their SVR and instead locking into a two-year fixed deal.
“Indeed, based on a £200,000 mortgage over a 25-year term on a repayment mortgage basis, the average monthly repayment on the average two-year fixed rate of 2.49% would cost £896.23.
“When compared to the current average SVR of 4.89%, this would see borrowers save £260.17 per month.”
Springall noted that “intense competition between lenders, including Barclays, Santander and TSB,” could signal others to follow suit.
“Borrowers must be aware that this current lending environment is unlikely to continue indefinitely and lenders could slow down this aggressive pricing if they see fit, meaning rates may rise as they did between March and November last year, when they increased by 0.14%.
“Therefore, any borrowers yet to refinance, or who are adopting the ‘wait and see’ approach when deciding on whether or not to make a house purchase, might want to consider doing so if they are anxious about ongoing uncertain economic factors.”