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Half of mortgage holders have remortgaged
Half of mortgage holders have remortgaged: should you be one of them?
Nearly half of UK homeowners with a mortgage have chosen to remortgage at least once without moving house. There are all sorts of reasons why people choose to do this, so is remortgaging something you should consider?
New research* reveals that more than 12.3 million people across the UK have chosen to remortgage their property at least once, despite not actually moving. This is most popular in London, where more than half of mortgage customers have switched mortgage one or more times.
Meanwhile, remortgaging is most common among 45 to 54-year-olds, with more than half of this age group choosing to do so at least once, while nearly the same percentage of 35 to 44-year-olds have also done this.
One of the main reasons people to choose to remortgage is so they can make sure they have the best deal. New mortgage deals are coming to the market all the time and just because the product you have was the best available to you when you got it, it doesn’t mean that’s still the case.
However, there are all sorts of other reasons why homeowners might decide to remortgage. They could do it to raise funds to extend their home and better accommodate their growing family. This might be because they wish their property was bigger but love it and don’t want to move. Alternatively, they might remortgage so they can consolidate their debts using their property as security, or release equity to support their retirement.
The Bank of England recently announced that it will be holding the base rate of interest at 0.5%, where it has remained for the last five years. However, it also revealed it will start to put rates up again from next year, which will have an effect on homeowners.
Most mortgage providers set their rates in-line with the base rate, and because that has been so low for so long it’s been a good time to get a fixed deal. With rates now expected to increase in the near future, if you’re not already on a fixed rate mortgage, it could be time to consider one. By fixing now, homeowners have the advantage of enjoying a lower interest rate for the next few years, even if the central bank rate increases.
To work out whether remortgaging is the right move, homeowners should find out how much they could save by moving to a fixed rate deal. It’s important to keep in mind that there could be a fee for changing products, and they may also face a charge from their existing mortgage provider for moving.
However, if after all of this has been taken into account they still stand to make a saving by fixing, it might be time to join the millions of homeowners who have remortgaged.
*OnePoll questioned a nationally representative sample of 1,822 adults aged 18 and over between 25th February and 7th March 2014. Figures have been extrapolated to fit ONS 2013 population projections of 50,371,000 UK adults.