Earlier this month, the Bank of England cut its base rate to an all-time low of 0.1%, following an initial emergency cut to 0.25% – a measure intended to brace itself for the looming coronavirus storm.
Following this Mojo Mortgages, an online broker, said it had experienced a surge in Brits rushing to sort out their finances and remortgage. Its own remortgage application figures have soared by 100% in the last two weeks, it revealed.
What’s more, online searches using the term ‘remortgage’ have also risen by 60% as more customers search for ways to reduce the cost of their home loan.
Richard Hayes, CEO and co-founder of Mojo Mortgages, said: “The coronavirus crisis has disrupted the housing market, undoubtedly. We’ve only just come out of a period of economic uncertainty with Brexit, and this pandemic has fuelled a level of uncertainty again.
“Obviously, health concerns are the immediate focus, but we’ve already seen the huge economic impact the virus can have, and people want to take steps to protect themselves, so cutting their biggest monthly outgoing, which is their mortgage repayment, makes financial sense and this is the key reason for why we’ve seen this increase at Mojo.”
The lowdown on remortgaging
Most people remortgage when the initial deal on their mortgage comes to an end. It’s a wise move because borrowers who don’t switch will revert to their lender’s standard variable rate (SVR) which can be very expensive.
Remortgaging means you can take advantage of a new deal which will most certainly be lower than the SVR and may also be lower than the current mortgage you are using to borrow.
When the Bank of England slashed its base rate to 0.1% lenders were able to pass this on to homeowners on tracker mortgages, so those customers will see an immediate impact.
However, Hayes said lenders had retracted nearly all tracker products on the market so new customers – such as home movers, first-time buyers and remortgagers – were unable to take advantage, even if they wanted to.
Fortunately, the price of fixed-rate deals has been extremely low recently, and therefore remortgagers will currently be able to take advantages of these cheap deals.
You can find out more about remortgaging by reading our guide – click here.
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What Mortgage has teamed up with L&C to offer you expert advice on the right mortgage deal.
Whether you’re buying a new home, remortgaging to a new deal or buying an investment property, L&C can help – and you’ll pay no fee for their advice. To find out more, click here.
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