Remortgaging might be the long term way to save money and give relief to a homeowner’s financial budget, but the number of remortgages seems to be declining according to recent data from LMS. The reasoning behind the decline in remortgage instruction volume is thought to be the ability for homeowners to take a mortgage repayment holiday. With that opportunity, homeowners have a quick fix and a bit of relief, though of course it is a short lived solution to what could be a long term economic problem as the pandemic seems to show no letting up. Experts encourage homeowners to not push the opportunity to remortgage aside since such low interest rate offerings could offer a longer term substantial savings.

In fact, many experts suggest homeowners read the fine print when it comes to the mortgage holiday. It might not impact one’s credit history, but it could be a consideration that has an impact when a lender goes to decide on whether to approve a future remortgage or not.

For those considering a remortgage, the rates are still low and very attractive. Some lenders are tightening lending, but many are still competitive and looking to catch the eye of borrowers with creative deals meant to be helpful during the pandemic economic hardship.

Experts suggest all homeowners, no matter where they are in their mortgage term, to shop around online and determine what savings could be had. Those that are on their lender’s standard variable rate (SVR) after choosing not to remortgage at the end of their term are especially encouraged to shop for a deal to save money and get off of the considered risky SVR type of mortgage loan.

In response the latest remortgage data, LMS chief executive Nick Chadbourne, remarked, “July’s data illustrates that the landscape has changed and the remortgage market continues to evolve. Consumer behaviours have inevitably altered in response to the pandemic, with 1 in 6 borrowers reportedly taking a mortgage payment holiday.

“However, completion volumes nearly doubled from June to July, as many people look for security and certainty in their personal finances. This, combined with higher rates of conversion and decreasing instruction volumes, has resulted in a reduced pipeline heading into August.

“Five-year fixes are rising again following the initial drop we saw in April, which isn’t surprising as borrowers look to lock in longer term deals with interest rates at all-time lows. Nearly three quarters of borrowers reported their motivations for remortgaging coming from a need for monthly payment security, which is a strong indicator of borrower behaviour. With the full effects of COVID-19 on the housing market unknown, we expect this trend to continue as borrowers look for certainty in their monthly outgoings.”