There has been a strong demand in remortgage borrowing from homeowners. No doubt the low interest rate deals available have pushed many to action. Yet, the numbers reveal that many are still waiting out the current lending environment, despite the fact that the Bank of England has lowered the standard base rate to the all-time historic low of only 0.1%. Homeowners have the opportunity to save money with a lower interest rate deal, and for many that savings could be substantial.

The recent release of data from LMS shows that while remortgage lending has been sought in higher levels than months past or even before the pandemic lockdown, it is slowing. The level of remortgage lending declined in the final week of June by 12.4% and by 5.5% further in the second week of July. 

This decrease could be attributed to the fact that those homeowners that have had their current mortgage deal end and have been moved to their lender’s standard variable rate (SVR) are quite comfortable on their current interest rate. No matter how comfortable, it is a variable rate and easily fluctuated rate and nowhere secure as a fixed rate remortgage. With the low interest levels now connected to fixed rates it could offer security and peace of mind against the unknowns for our economy and lending market in the months and years ahead.

Nick Chadbourne, the CEO of LMS, remarked, “When considering the recent market data, we should consider the bigger picture surrounding the reduced remortgage instruction volumes. The home-moving market is back up and running and is likely to be impacting brokers’ time which now must be split between dealing with both new home buyers and remortgagers.

“The dominance the remortgage market has enjoyed since March is concluding as brokers must focus on assisting clients looking to move in a difficult market, this change is likely impacting the rate and volume which we are seeing new instructions.

“While the decreasing instruction volumes cannot be ignored, they are not yet cause for concern. Typically, we have fewer ERC expiries in the summer, which naturally leads to a slower quarter for instructions.

“In addition, the reduction of 90% and higher LTV products available are reducing the number of borrowers able to remortgage and therefore impacting the number of instructions.”