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Recent rate rise to lead to more remortgaging: Moneyfacts

Data from Moneyfacts shows that the difference between a two-year fixed rate mortgage taken out two years ago and today’s standard variable rate is at its highest since March 2008.

The firm reports that the average SVR increased from 4.72 per cent in August to 4.85 per cent so far in September. With the average two-year fix from two years ago being 2.44 per cent, the difference between the two now stands at 2.41 per cent.

In March 2008, this difference stood at 2.47 per cent.

This ten-year high in difference, Moneyfacts says, will power further remortgage activity, which is already dominating the mortgage market, according to UK Finance.

Moneyfacts finance expert Charlotte Nelson says: “This [data] shows the significant impact the 0.25 per cent jump in base rate has had on the mortgage market just one month on from the rate rise. A year ago, when the variance stood at 1.88 per cent, borrowers reaching the end of their fixed deal would perhaps not have reacted as quickly as they may do today when approaching an SVR.

“It is likely that many savvy borrowers pre-empted the base rate rise and have already remortgaged to another fixed deal, which in turn has boosted remortgage activity… the extra motivation is only going to boost this remortgage trend further.

“The increased benefit to be gained by switching deals mean providers will need to remain competitive or face losing a substantial chunk of their mortgage book. However, as it is becoming increasingly difficult for lenders to lower rates, they may look at other aspects of the mortgage package to attract remortgaging customers, such as fees and incentives.”


Remortgage activity “spikes” in second quarter: Imla

The Intermediary Mortgage Lenders Association Mortgage Market Tracker for Q2 shows that 76 per cent of remortgage applications resulted in a completion, up from 70 per cent in Q1. This amounts to 115,000 new remortgages, a rise of 8.4 per cent year-on-year, totalling £20.7bn. Imla points to anticipation of August’s interest rate rise as a […]

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New tenant fees bill one step closer to becoming law

The much-debated tenant fees bill passed through its third reading at the House of Commons yesterday afternoon, increasing the likelihood that charging tenants fees will soon be banned alongside other regulatory changes. All that remains is for the bill to be debated in the House of Lords, after which it will become an Act (law). […]

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White paper — Nigeria International Insights

Jelf Employee Benefits closely examines healthcare provision and challenges within Nigeria. This will be of particular interest to HR decision makers with employees based in Nigeria, and assesses the environment, risks, facilities and safeguards that are relevant to organisations that are actively deploying expatriate staff in this location.


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