New research has indicated that up to one in six UK home-owners are considering remortgaging their property during the next six months. The so-called mortgage price wars are persuading a number of property owners to take advantage of record low prices.
According to a report from the Nottingham Building Society, homeowners are looking to save over £1,100 per year by going through the remortgaging process.
Data from the report shows that remortgaging activity increased by 15% month on month. Experts are predicting a further surge with the news that recent rate cuts have seen many five-year fixed rate mortgages fall below 2%.
Further findings indicate that five-year fixes are the most popular option for customers considering remortgaging, with 27% saying this was the case. 21% preferred a two-year fixed-rate deal.
Overwhelmingly, three-quarters of respondents said that they would choose a fixed-rate term. 12% said they would prefer a deal for longer than five years.
Only 7% of those questioned said they would go for a tracker deal, 4% said they would consider discount deals and 7% said they would choose a standard variable deal.
The mortgage price war is interesting to existing home owners who are keen to take advantage of the record low rates,’ said Ian Gibbons, senior mortgage broking manager for Nottingham Mortgage Services. ‘With interest rates expected to rise in the coming years then now could well be the right time for many to consider whether there are savings to be had,’ he added.
More homeowners looking to remortgage
Gibbons explained that, ‘potentially, savings are higher than the average £99 a month people are looking for. Someone with a £150,000 mortgage who moved from a deal a 4% to one at 2% could be around £3,000 a year better off.’
‘However, to secure the best remortgage deal it is important to look at more than the base rate. You need to search the whole market and to be aware of the product fees that may be charged. A great rate won’t save you much if you have to pay a high fee,’ he concluded.