Record homeowner remortgage rates in August

Posted on Thursday, October 5 by Joy Tibbs

Remortgaging was responsible for a record proportion of valuations in August, according to new figures from Connells Survey & Valuation.

The proportion of remortgage valuations rose by 3% year-on-year, constituting 37% of the entire market. The growth in remortgaging, including buy-to-let remortgaging, was driven by high levels of competition from lenders who are reducing their rates to attract potential borrowers.

Consumers are opting to lock in these lower rates, securing long-term, fixed-rate remortgages ahead of a potential base rate rise later in the year.

Connells’ corporate services director, John Bagshaw, said: “Remortgaging is quickly becoming the dominant activity in the lending market. The record high in August was driven by consumers seeking out better value borrowing.

“Having benefited from a decade of low interest rates, consumers are sensing the risk that this era is nearing an end. Many older mortgage deals are expiring this autumn which will mean moving onto more expensive standard variable rates. As a result, homeowners on these deals are opting to refinance, taking advantage of the intense competition in the mortgage market right now.

“Despite a slight slowdown in transactions this August, official figures suggest house price growth has held up. This rise in property prices means homeowners could now get a better loan-to-value ratio when remortgaging than when they first borrowed – potentially allowing them to lower monthly repayments. With so much economic uncertainty and hints of a base rate rise, many are choosing to lock into a lower rate to see them through the next few years.”

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