Lenders launch new remortgage deals

High-street lenders have been offering increasingly attractive remortgage deals in recent days – making now a good time for borrowers to review their current mortgage rates and save money, brokers say.

This week, Barclays extended its new remortgage offer, which it launched last month, by increasing the maximum loan-to-value from 70 per cent to 75 per cent and adding a new range of rates. Skipton Building Society has also launched a new range of competitive fixed-rate mortgages for higher loan-to-values, available for both purchases and remortgages.

Mortgage brokers have already seen an increase in the number of borrowers looking to remortgage as a result of improving rates.

“Remortgaging levels have picked up not so much because borrowers think interest rates are going to rise but as a result of the extremely attractive deals on offer, particularly on trackers,” said Melanie Bien, director of Private Finance, the mortgage
broker.

According to broker John Charcol, remortgages have so far accounted for 56 per of the firm’s business this month, the highest remortgage percentage since April 2009. Countrywide said remortgage activity increased by 8 per cent in October and now makes up 25 per cent of all mortgage applications via the broker.

David Hollingworth of London & Country said borrowers have begun to realise that they are able to save more money by remortgaging. “It’s definitely worth borrowers doing a review of their mortgage to see what options are now available for them,” he said.

The number of borrowers remortgaging had plummeted over the course of the past two years, with most homeowners opting, or being forced, to stay on their lenders’ standard variable rates (SVR) – the rate that customers revert to when a fixed or tracker rate comes to an end.

But the launch of several low fixed and tracker rates means that most borrowers currently on their lenders’ SVR can now save money by remortgaging.

At present, the cheapest two-year tracker on the market remains Royal Bank of Scotland’s 1.99 per cent deal. The rate – Bank of England base rate plus 1.49 per cent – is available up to 60 per cent loan-to-value and comes with a £999 fee.

For a five-year fixed rate, the best buy is now Natwest’s 3.75 per cent, available up to 50 per cent loan-to-value with a £699 fee, following the withdrawal of ING’s market-leading rate of 3.69 per cent this week.

Hollingworth warned that some of the rates are unlikely to remain on the market for long. “Some of the recent remortgage deals launched by lenders will be engineered to bring about a bit of business before the end of the year, so the rates aren’t guaranteed to stay around,” he said.