Have you considered remortgaging in the last year?
If so, you are likely to have found it more difficult than you thought. With hundreds of thousands of borrowers unable to renew mortgage deals and having to remain on their lenders’ ‘standard variable rate’ (SVR), remortgaging in the UK hit a 13 year low in 2010.
Figures from the Council of Mortgage Lenders (CML) showed that the number of people remortgaging fell to just 313,200 in 2010. This is compared with 408,000 in 2008 and over a million at the peak of the housing boom.
‘Little incentive’ to remortgage
Over the last year, many thousands of borrowers have seen their mortgage rate revert to their lenders’ SVR when their fixed or discount deal ended. Historically, this would have been an expensive way of borrowing; however record low interest rates have made SVRs very low.
Melanie Bien, director of independent mortgage broker Private Finance, said: “There has been very little incentive to remortgage over the past year, with interest rates stuck at historic lows and the majority of borrowers slipping onto cheap variable rates with no remortgage fees or early redemption charges to worry about.
“However, this situation is likely to change this year with remortgaging growing in popularity if borrowers seriously believe that interest rates are going to rise significantly.”
Fewer purchase mortgages in 2010
In addition to fewer remortgages, the Daily Telegraph reports that ‘the CML figures also showed the number of mortgages advanced to people buying a property dropped for the fifth consecutive month during December as activity in the housing market remained subdued.’
There were just 39,900 mortgages for house purchase approved in December 2010 – the lowest level since February last year.
Michael Coogan, director general of the CML, said: “2010 was about the mortgage market continuing to adapt to the post-credit crunch environment, and the full-year data shows that the lending industry is now on a more stable footing but at historically low levels of activity.”
