Remortgaging amongst homeowners has fallen out of favour following the stamp duty holiday as people opt to move house instead.
The temporary government initiative aimed at getting the property market moving following the lockdown has seen more than half of homeowners choosing to move house with 56% taking a step up the property ladder compared to 44% who are remortgaging.
This time last year, it was a very different picture with 63% of homeowners remortgaging and 37% moving house.
Trussle, the online mortgage broker which compiled the data, suggested many next time buyers had been motivated to make the jump to a new home because of the prospect of saving up to £15,000 on a new home purchase and a desire for a larger property.
But it warned, with delays in the market due to unprecedented demand, transactions in England were now taking around 115 days to complete.
As such it was keen to ensure homeowners were aware of the costs they could incur if they had not completed by 31 March 2021 and that they knew the benefits of remortgaging.
Indeed, it said, slipping onto an expensive standard variable rate (SVR) – which is the rate borrowers move to if they don’t switch at the end of their deal – could increase their monthly outgoings.
Previous research from Trussle found that people can save an average of £4,500 a year by remortgaging, which is equivalent to 15% of the UK’s average salary.
Continued low interest rates mean many fixed rate mortgages are competitive, especially for those that have equity in their properties.
Miles Robinson, head of mortgages at Trussle, said: “After an uncertain year, it’s encouraging to see house prices rising and the property market moving, with a sustained interest for house moves.
“While many homeowners contemplate buying a new home, it’s important to keep on top of your current mortgage and consider remortgage when the time is right.
“Every year, thousands of homeowners unknowingly move onto a high standard variable rate (SVR) when their mortgage deal ends and their monthly payments can increase considerably.
“Homeowners can save £344 on average per month by remortgaging, which is a significant sum.
“In these unprecedented times, we’d encourage those who are concerned about their finances to keep an eye on their mortgage. It’s worth using a remortgage calculator to see if switching to a better deal could save money.”
