14% of homeowners attempting to remortgage in the past two years have failed to secure another deal, according to new research from the Nottingham Building Society.
It found that missing out on a deal with their existing lender or a new lender meant higher monthly costs for 26% of those who could not remortgage with 8% seeing a substantial rise in payments.
The main reasons for not being able to secure a new deal included tighter affordability rules following the Mortgage Market Review and issues with credit records, the research found.
Around 26% of those who could not remortgage say they were turned down either because they did not fit new affordability rules or because their credit record had deteriorated. However 11% say they were turned down for being too old.
Council of Mortgage Lenders (CML) data shows the number of remortgage loans hit 31,000 in September with a total of £5.1 billion compared with £4.3 billion and 27,900 a year ago but analysts warn homeowners who cannot remortgage end up missing out on much lower rates.
Currently the average standard variable rate, according to the Bank of England, is 4.5% while average two-year fixed rates at 75% loan-to-value are 1.91% and 3.03% at 90% loan-to-value.
On a £200,000 loan someone moving from 4.5% to 1.91% could save as much as £430 a month and even moving to 3.03% would save around £240 a month.
Ian Gibbons, senior mortgage broking manager for Nottingham Mortgage Services (NMS), which is part of The Nottingham, said: “With rates remaining low it is potentially a good time to remortgage to a new deal but unfortunately it is not always that simple.
“With more than a quarter of those who have tried to remortgage in the past two years not being able to secure a new deal it is clear that homeowners need to think carefully and research the market.
“People’s circumstances change and seeking help from a broker to get an independent view on the best deal available to a customer is a very sensible approach.”
