Opinion: everyone is remortgaging – and you should too

Don’t sit on that rubbish mortgage rate for a second longer than you need to.

I’m not a huge fan of feeling the need to do something just because loads of other people are doing it.

But when it comes to remortgaging, I will make an exception.

According to the latest figures from trade body UK Finance, there were 16,810 new remortgage deals taken out in March.

That’s up by 9.1% from the same month a year ago, a massive annual jump, and up by 4.1% from February.

It’s notable that the vast majority – 15,030 – were pound-for-pound remortgages, meaning there was no additional borrowing, with remortgaging growing year-on-year for the twelfth straight month.

Indeed, the level of remortgaging activity is so sharp that Andrew Montlake, director of broker Coreco, suggested that it had “gone off the Richter scale”.

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Why buy now?

This rise in remortgaging is particularly notable when you compare it to what’s happening elsewhere in the mortgage market.

According to those same UK Finance figures, there were just 28,800 new first-time buyer mortgages in the month, down 2.4% on last year.

That’s the first annual fall in first-time buyers since last September, while the number of mortgages for home movers dropped by 6% over the same period.

And as for buy-to-let, there were just 5,000 new deals for purchases in March, down by 9.1% on the same point last year.

However, landlords are also keen to remortgage, with buy-to-let remortgages up 3.9%.

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Why remortgage now?

It’s time to mention the ‘B’ word. A big driver in remortgage business appears to be the never-ending saga that is the UK’s exit from the European Union.

It’s not hard to understand why.

Whether you’re a remainer, leaver or just sick of the whole bloody thing, there remains huge uncertainty about just what is going on and how our economy will react to Brexit if and when it actually happens.

And while it might be tempting to scoff at the idea that this uncertainty is really making a difference, plenty of property experts argue that it is, whether it’s would-be buyers putting off purchases until after the process is complete to borrowers looking to remortgage to a cheaper – and more stable – deal.

After all, if you’re worried that interest rates are likely to rise in the months to come, why wouldn’t you look to protect yourself from the potential bill shock by moving to a new rate?

Of course, there are also plenty of borrowers on their lender’s standard variable rates (SVR).

These are the deals you move onto once your initial fixed or tracker rate comes to an end, and is usually far more expensive than your initial deal, typically costing around 4.5%.

Which? reckons that as many as one in four households are on the SVR – that’s millions of people shelling out a fortune on a rubbish mortgage deal who are prime candidates for remortgaging.

All it takes is the realisation that they could save a few quid by switching to a new deal.

If you've not remortgaged before, this guide will take you through the whole process. If you know what's involved, you can jump straight in and start comparing deals here.

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What type of deal should I remortgage to?

Of course the type of deal you should remortgage to will depend significantly on your circumstances.

Personally, I’ve long been an advocate of longer fixed rates – each of the three mortgage deals I’ve taken out since first purchasing a property have been five-year fixed rates.

Yes, you pay a bit of a premium in terms of a slightly higher rate than a short-term fixed rate, but the certainty of knowing precisely how much your monthly bills will be for a longer period has always seemed worth it.

Besides, you also cut out the additional costs of having to remortgage more frequently – such as product fees – that would be incurred if you went for a two-year fixed deal.

I’m clearly not the only one that thinks so either. A host of brokers have reported a growing number of borrowers are opting for longer fixed-rate deals, in some cases for as long as ten years.

Online broker Habito said it had seen the number of ten-year deals taken out over the last year jump a whopping 68%.

So not only are loads of people getting on board the remortgage train, they are also generally going for stability in the form of long-term fixed rate deals when they do so.

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