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Re-mortgage and mortgages

In December’s blog we looked at the likely state of the mortgage market in 2019. We quoted Darren Cook of Moneyfacts as saying that home owners were looking for some certainty about their finances in the face of an uncertain economic outlook. That uncertainty is not all Brexit related by any means, so an awareness of the state of the market can help you to make important choices about your mortgage.

There are two contrasting set of statistics that can help us understand how the housing market is currently operating. The most recent ONS (Office for National Statistics) report tells us that transactions recorded with the Land registry fell by 3.2% during the middle of 2018. Transactions for flats and maisonettes, fell by 9.6% as buy to let investors grew more cautious of entering the market. The second stat that can help us understand the market is from UK Finance and shows that 50,500 homeowners re-mortgaged in October 2018, up by 23% year-on-year. UK Finance go on to say that many loans are coming to the end of their fixed terms currently and this, combined with uncertainty over Brexit and the potential for further base rate rises, has resulted in homeowners looking to secure good fixed rate deals while they are available.

This doesn’t tell the whole story. More than a third of homeowners are still on a standard variable rate mortgage (SVR). 58% of home owners have never re-mortgaged and 3.4 million households don’t know their current mortgage rate. As the average saving on switching to a better deal, according to Moneyfacts.co.uk, is £216 each month or over £2,500 annually this means that a lot of people are not making the best use of their potential savings. David Hollingworth from L&C Mortgages said: ‘’It’s worrying to see so many people still on a standard variable rate mortgage as they are not the cheapest rates available. Not only is there a lack of awareness around how much could be saved but worse still a huge number of people have never even tried to re-mortgage to get a better deal.

To return to our December blog, we focussed then on the fact that fixed rate mortgages were not rising in line with base rates, whereas the SVR was tracking the changes more closely. With the Bank of England now predicting two further rate rises before 2020 the SVR looks set to keep climbing.

At Spot On Mortgages we provide an across the market, personally tailored advice and arrangement service for mortgages. It is certainly worth taking time to investigate the options available for your mortgage and see what savings you could achieve. Get in touch to discuss your specific circumstances.

 

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