Re-mortgaging your property has seen a year on year and, month on month increase for the month of April.
Many people are seeing an opportunity to release equity from their home. On average, homeowners were re-mortgaging to raise £29,148 for them to use for home improvements or to clear other burdens. This is all happening when the mortgage market is slowing.
Why is this?
One of the reasons attributed to this is the interest rates currently available on re-mortgages. For example, a two-year fixed average rate in May 2015 was 2.95% and, if they were to remain with the same mortgage and move to the lenders Standard Variable Rate (SVR), they would be moving on to an average SVR of 4.59%. Compared to a new two-year fixed rate in May 2017 where the average interest rate for such products is just 2.30%. That is a 0.65% saving from 2015 but an even more impressive 1.64% interest rate saving from the average SVR.
Re-mortgaging for long-term security
There has also been a recent increase in the number of homeowners re-mortgaging on to longer term fixed period. Over a third of re-mortgages in April moved onto five-year fixed rate deals, which was even higher than the two year fixed equivalents. It is believed that the uncertainty of recent times is a factor behind this and the fact that real wages are continuing to fall.
The interest rate may also be playing a part in this too as the average interest rate on five year fixed deals is currently 2.89%, which is lower than the average interest rate on two year fixed deals from two years ago (2.95%).
If this has encouraged you to consider the current situation relating to your own mortgage and would like advice on re-mortgaging your home, please do not hesitate to contact us on 01536 512724. Alternatively, you could visit our contact us page to send one of the team an email or complete the contact form.