31% of eligible homeowners are expected to benefit from low interest rates and remortgage in 2017.
25% of those plan to remortgage in January. However, a new report from TSB suggests that nearly half are underestimating the potential savings they could be making.
According to TSB’s survey of 2,000 homeowners, the average saving they expected to make from remortgaging their property was estimated at £49 a month. This compares with an actual average of £96 per month, or £2,300 across the life of a two-year fixed term on a £100,000 mortgage.
33% of those dubbed ‘JAMS’ (those homeowners who identified their financial situation as ‘just about managing to cover monthly costs and outgoings’) are planning to remortgage in 2017, with 88% doing so to free up monthly income, lock in at a fixed rate to better manage their money, or take advantage of the low interest rate environment.
Ian Ramsden, director of mortgages at TSB, said: “Mortgage payments are often the biggest outgoing for many households. By remortgaging, homeowners stand to save up to £96 per month on average, which can make a huge difference to family finances. It could mean being able to afford a family holiday, carry out much needed home renovations, or simply help ease the pressures on household finances each month.”
TSB saw a 27.5% increase in remortgage applications in 2016 compared to 2015, has launched its Stay Nation Britain report to explore the outlook for remortgaging in 2017.
Despite these potential savings, some homeowners remain unaware of the opportunity altogether. 54% aren’t able to correctly identify the Bank of England base rate as 0.25% and 15% of homeowners who aren’t considering remortgaging say they won’t be doing so because it’s too much effort or it hasn’t crossed their mind.
Ramsden added: “Remortgaging might not be right for everyone, but it’s important to understand your options. It doesn’t have to be complicated or time consuming to remortgage so it’s well worth investigating if people are looking for ways to make their finances go further in 2017.
“At TSB we’ve helped almost 6,000 people remortgage onto lower rates since the Bank of England lowered the base rate.”