The number of remortgage applications is currently higher than last year, with many remortgagors seeking out longer-term deals.
According to a study by LMS, 38,475 re-mortgage applications were received in April, marking an increase of 8% on the March figure. The figure was 10% more than April 2016. The value of remortgages received also increased, to £6.1bn – an increase of 2%.
Figures from the CML indicated that total mortgage lending has fallen by 11%, which means that 33% of the total lending was due to remortgages. This shows that although the property market is slowing down, people are still keen to remortgage. Paying off debts is the reason for a remortgage, given by 15% of people in April, which may be an indication of the financial strain being felt by homeowners.
The most popular reason for a remortgage is for home improvements, with 24% doing so in April. The average amount of cash being released by a remortgage was £29,148. More than a third of people who were remortgaging were looking for a longer-term deal, with 34% opting for a five-year fixed-rate deal. The number of people choosing a two-year fixed-rate deal fell to 24%. The report states that homeowners are continuing to look for security, as the economy is weaker due to Brexit, the General Election and the real value of wages, which continues to fall.
The various terms and rates available for mortgages can be confusing, which is why it is preferable to seek advice from a CeMAP-qualified mortgage advisor.
