Remortgaging grew in popularity last year as borrowers took advantage of low rates by locking into longer fixed term deals.
According to Paragon Mortgages, 39% of all mortgages handled by advisers between October and December were remortgages – an increase of 7% on Q1.
This figure is also 4% up on the same period in 2015.
Remortgaging involves switching your current mortgage deal either with your existing lender or to a new one.
By choosing to remortgage you can reduce monthly repayments, move from a variable rate deal to a fixed rate or even release equity in your property.
In August, the Bank of England cut the base rate for the first time in seven years to 0.25%, prompting mortgage lenders to slash rates.
With the number of competitive deals on the market growing, many borrowers are choosing to remortgage to take advantage of the low rates currently on offer.
Paragon’s latest Financial Advisors Confidence Tracking (FACT) Index revealed that next-time buyers are now the second most common type of borrower, accounting for 23% of mortgages handled.
Next-time buyers are now the second most common type of borrower having overtaken buy-to-let lending, accounting for 23% of mortgages handled.
Buy-to-let lending fell away in Q2 following the increase in stamp duty but had recovered by Q4 to 19.3% of all business.
First-time buyers account for 18% of mortgages handled despite a 2% decline in Q4 2016.
In terms of interest rate type, there is a clear preference among borrowers for fixed rate mortgages, which accounted for 83% of all cases in Q4 2016 and has increased year-on-year since 2010.
Tracker mortgages remain a distant second at 14% of all cases, representing little change over the course of 2016.
Initial fixed or tracker periods of two years are still the most popular products, making up 53% of all cases in Q4 2016 – an increase of 5% on the same quarter in 2015.
Longer term products of more than two years accounted for 46% of all cases in Q4 2016, with five year fixes the second most popular product at 33% of all business.
John Heron, managing director atParagon Mortgages, said: “Our survey data shows increased levels of activity over 2016 driven particularly by borrowers remortgaging to better rates. These are as likely to be longer term fixes as they are short term deals which bodes well for customer resilience in an uncertain market.
“Buy-to-let had a very strong start to the year with customers looking to beat the stamp duty deadline. There was an inevitable decline in lending in Q2 but volumes have slowly improved as landlords have developed their strategies to mitigate higher taxes on rental income.”
