The dramatic growth in remortgage business saw applications for remortgages rise by 98% in the six months to 30 November, year-on-year.
In September, applications were up 143% compared to the same month in 2014, with the upsurge dropping slightly in October to a 101% increase. November saw the biggest jump of the year so far, with a huge 150% rise in remortgage applications on the same month of the previous year.
The upswing over the three months equates to a rise of 128% in the number of borrowers applying to remortgage year-on-year in September, October and November.
Moneyfacts data shows that mortgage rates were at a record low during the summer, when the average two-year fixed mortgage rate fell by 0.16% at the start of July, to 2.76% at the beginning of August, the lowest rate on record. The reductions favoured higher loan-to-values disproportionately, although all rates for loan sizes across the market saw considerable rate cuts.
David Hollingworth, Associate Director, Communications, at London & Country Mortgages, said:
“It’s good to see a healthy number of borrowers taking the opportunity to review their mortgage and take advantage of the very competitive rates on offer. The combined appeal of cutting monthly payments and protecting against future rate rises should maintain a strong level of interest.
“Rates have not only improved for those with big deposits but also for those higher up the LTV scale, so there should be even more people that can now grab the opportunity to cut their mortgage costs.”
David Robinson, Accord’s National Intermediary Sales Manager, added:
“We saw this trend begin in the summer and it has continued, culminating in a 2015 high in November. We believe this is a result of near to record-low rates on loans across the market, with borrowers locking into low rates while they can.
“It seems that despite the Bank of England cooling its assertions that a base rate rise is around the corner, the appetite for remortgage is still extremely high amongst UK borrowers.
“Brokers have an important role to play in advising and helping their clients understand whether now could be the best time to remortgage.
“It’s a good opportunity for brokers to start a conversation with anyone who is coming to the end of the fixed rate tie-in on their mortgage, to examine whether they would benefit by fixing now while market conditions are still extremely favourable to borrowers.”
