Remortgaging is back as borrowers switch and save
Monthly remortgage lending rose to a seven-year high of £6.2bn in January 2016, according to LMS, a rise of 49% from £4.2bn in December 2015.
This is the largest value of remortgage lending in a month since November 2008, and is 45% higher than January 2015’s figure of £4.3bn. Plus the number of remortgage loans taken out increased by 44% in one month alone, from 25,500 in December to 36,666 in January.
The average remortgage loan size hit an all-time high of £170,319 in January, up 8% from December and 12% year-on-year.
Andy Knee, chief executive of LMS said: “With rising house prices, interest rates at historic lows and a host of competitive products available to choose from, growth is likely to continue even after the Stamp Duty panic dispels. Swap rates are also expected to decrease in mid to late February, lowering the lenders’ costs of loans further and boosting competitive offers.
“The indication that the Base Rate will stay low for a while longer means borrowers will continue to enjoy great rates. On top of that, the shadow of a Brexit and global economic uncertainty looms on, precluding a Base Rate rise. However it would still be advisable for savvier borrowers to lock into low rates to maximise their cost savings.”