Lower rate secured by 85% of remortgagors
An overwhelming 85% of remortgagors were able to lower their mortgage rate by switching last month, according to LMS.
The conveyancing panel manager also found that almost two thirds of people who remortgaged in September believe they will do so again within the next four years (64%).
Saving money is by far the most important factor when choosing a lender with 55% of remortgagors choosing their lender because it offered the cheapest mortgage deals or best interest rates. This is more than twice as many as the second most popular option: 22% who opted for a lender based on a recommendation from their broker or adviser.
Only 8% said a lender’s reputation was the most important factor when choosing a product, while just one in 20 (5%) said customer service was the most decisive factor.
Andy Knee, chief executive of LMS, added that longer-term fixed rate were becoming more popular with switchers: “While two-year fixed products remain the most attractive to remortgagors, the growth in popularity of five-year term fixed mortgages is interesting and suggests two distinct personalities among homeowners at present; those keen to take advantage of competitive rates and lower costs with short-term fixes and; those who are more cautious, prioritising greater stability in a period of uncertainty by fixing for longer.
“As the terms of Brexit remain unclear and its impact on prices and costs are not fully realised, it will be interesting to see whether more people start erring on the side of caution or wait for more information.”