Remortgage customers have been able to benefit from some of the lowest rates ever seen, yet recent research from moneyfacts.co.uk shows that time may be up for these competitive deals.
The table below highlights how the rates available to those remortgaging have creeped up in the past six months, with the average two-year fixed rate for those remortgaging now even higher than a year ago.
| Remortgage products | One year ago | Six months ago | Today |
| Two-year fixed rate average | 2.56% | 2.44% | 2.58% |
| Five-year fixed rate average | 3.32% | 2.96% | 2.98% |
| Source: moneyfacts.co.uk |
Charlotte Nelson, spokesperson at moneyfacts.co.uk, said: “The fact that some rates are starting to creep up for remortgagors is unwelcome news for those borrowers who have yet to capitalise on the heightened competition that has caused low rates to appear in the market.
“Rates have been on a downward trajectory for such a time that it has almost become the new norm. Those looking to remortgage today may therefore be shocked to see that some rates have witnessed a 0.14% increase in just six months. The average two-year fixed rate will cost borrowers £14.11 a month or £169.32 a year more today compared to six months ago, and with the talk of a base rate rise on the horizon there is no telling by how much more this could potentially rise.
“The uncertainty in the economy, combined with base rate speculation, has caused the need for providers to rethink their offerings and react accordingly. While the lowest rates in the market remain put for the time being, lenders have started to tinker with their products that are not in the spotlight.
“Due to all the talk surrounding base rate, borrowers have started to consider their options in case the base rate were indeed to increase. Given that £35 billion worth of mortgages will be reaching maturity this autumn, a large chunk of borrowers will be facing these rising rates, which means some consideration will be required.
“Borrowers should not be put off from remortgaging, however, as there are still savings to be made, particularly as the average SVR currently stands at 4.60%. And of course, the rate is not the only cost for borrowers to consider; they’ll want to be on the lookout for decent incentives and regularly check in on the Best Buys to see what is out there.”