Experts are warning that remortgaging could become quite difficult in the months ahead. As the pandemic attempts to make its greatest impact during the winter season, and homeowners will need the opportunity to save money where possible, it might be harder than expected to get a deal. This could come as a shock to the many that are due to have their mortgage terms end and were expecting a quick switch.

Lenders have already been tightening up the mortgage market. There are fewer new products being made available, and it appears the lowest interest rate deals are disappearing. Much of the reasoning is that demand grew as interest rates dropped and as lenders sought to work at levels close to normal despite lockdowns and other restrictions.

To cope with the demand, and in response to it, competitiveness for new borrowers faded. There was no need to offer enticing deals to grab the attention of borrowers, especially home buyers. They would come, for despite the lowest interest rates and more attractive deals disappearing, there were still benefits to be found and the dream of being a homeowner was in sight when the outside world was becoming more stressful and uncertain.

Homeowners were not showing as much demand for remortgages as buyers were for mortgages. They had the benefit of taking repayment holidays to help with their priority of finding relief from financial stresses on the household budget. Yet, the saving holidays are coming to an end. 

Also, there were homeowners that when their mortgage term ended found being moved to the lender’s standard variable rate (SVR) was not so bad. It might not have had the lower rates a remortgage would offer, but for many the SVR was lower than their previous interest rate. Those acceptable SVRs are now edging up, and are expected to continue to do so. To escape the risky nature of an SVR homeowners are expected to turn to remortgaging. 

With demand expected to rise, and risk to lend increasing due to the continued pandemic, remortgage lending is expected to follow the way of current mortgage lending. Fewer products brought to the market, the lowest interest rates deals pulled, and stricter borrowing criteria. 

The takeaway on the expectations for those considering a remortgage is to shop around as soon as possible. Consider the advice of experts and shop online for quick quotes to get information in hand of possible deals offered. Then take action while the market is favorable and before things change as winter sets in and opportunities are lost.