Almost one in six homeowners consider remortgaging

Around one in six (16 per cent) of homeowners are mulling over a remortgage in the next six months, new research from the Nottingham Building Society (The Nottingham) shows.

The ongoing price war on the mortgage market results in continuing rate cuts , which gives customers a wide range of competitive offers to choose from.

Remortgage customers are targeting average savings of £99 per month, corresponding to £1,188 a year, according to The Nottingham study.

This comes as Council of Mortgage Lenders figures show lending for remortgaging increased 15 per cent month-on-month in the most recent data and industry experts are forecasting a surge in remortgaging in response to recent rate cuts which have seen five-year fixed rates drop below 2 per cent.

The Nottingham’s research shows five-year fixes are the most popular choice for customers considering remortgaging – 27 per cent of potential remortgaging customers would choose a five-year fix ahead of 21 per cent opting for a two-year fix.

The study found that 12 per cent would ideally fix for longer than five years.

There is a strong demand for fixed-rate deals wtih around three-quarters of those considering remortgaging saying they would choose a fixed-rate deal.

Just 7 per cent of those surveyed would choose tracker rates while 4 per cent would consider discount deals and 7 per cent say they would choose a standard variable rate.

Ian Gibbons, senior mortgage broking manager at Nottingham Mortgage Services, said:

“The mortgage price war is interesting to existing homeowners who are keen to take advantage of the record low rates.

“With interest rates expected to rise in the coming years then now could well be the right time for many to consider whether there are savings to be had.

“Potentially savings are higher than the average £99 a month people are looking for. Someone with a £150,000 mortgage who moved from a deal at 4% to one at 2% could be around £3,000 a year better off.

“However, to secure the best remortgage deal it is important to look at more than the base rate. You need to search the whole market and to be aware of the product fees that may be charged. A great rate won’t save you much if you have to pay a high fee.”

The table below shows the remortgage intentions around the country – Londoners are the most likely to consider remortgaging.