Growth in remortgage activity following base rate rise
New research has revealed that the December saw the number of remortgages grow by 41% year-on year.
According to data from LMS, the total number of remortgages stood at 39,943 during the final month of 2017, having risen from 28,400 in December 2016.
This has been partly attributed to November’s base rate rise to 0.5%, with most lenders passing on the increase as well as boosting their own standard variable rates. Around half of the households in the UK which have a mortgage – approximately 8.1 million – are on a standard variable rate or tracker rate, a factor which contributes further to a climate which pushes homeowners’ incentive to remortgage. Following November’s interest rate rise last year, Bank of England Governor Mark Carney said that two further rate rises were likely to occur within the next three years.
With another base rise forecasted, it’s unlikely that the increase in activity will subside anytime soon.
Commenting on the research was Nick Chadbourne. The chief executive of LMS stated: “We are still in a ’settling-in‘ period – borrowers and lenders have yet to fully acclimatise to the current situation. But rising interest rates on trackers and standard variable rate mortgages are driving remortgage activity with borrowers highly motivated to remortgage. In this busy climate, all the stakeholders in the mortgage industry need to do what they can to make the borrowing process as simple and straightforward for consumers as possible.”