Remortgages as a share of total searches have risen 5.3% in the last year, new analysis from Experian has revealed. Over a quarter (28.7%) of September’s mortgages searches via Experian’s comparison service were for remortgages compared to 23.4% in September last year. Correspondingly, the proportion of first-time buyer mortgage searches fell by 5.3% to 55.3% of searches.
With the uncertainty surrounding the UK, Experian’s monthly credit barometer found mortgage borrowers are increasingly looking to switch to fixed-rate products to lock in lower rates. Almost all borrowers searching via Experian are now selecting a fixed-rate mortgage interest type when looking at repayment options.
91.3% selected a fixed monthly repayment option in September compared to 69% in September 2018 – a growth of 32.3% versus 12 months ago. 5.6% searched for a variable interest rate type and 3.1% for a tracker last month.
Currently, homeowners could find themselves overpaying by around £2,436 annually if they don’t re-mortgage when their introductory offer ends and they slip onto their providers’ Standard Variable Rate (SVR).
Amir Goshtai, Managing Director of Marketplace at Experian said “Last month we revealed that mortgage applications had increased by 9.8% year-on-year. Our latest mortgage findings suggest remortgages could be contributing to the rise in applications in the mortgage market as homeowners are increasingly locking in fixed deals amongst a backdrop of economic uncertainty.”
“With interest rates relatively low, a typical borrower could save up to almost £2,500 a year by switching to fixed monthly payments from a standard variable product. Fixed-rate mortgages provide more certainty and security with outgoings. They also help to aid better planning and budgeting, especially at a time when many external economic factors remain unclear.”
Looking at the latest barometer, the insights also reveal balance transfer cards are the most selected credit card type. 36.3% searched for a balance transfer card in September – up 3% from August.
Loan searches increased by 0.4% from August. The most selected reason for a loan in September is debt consolidation. Growing popularity in balance transfer cards and loans for debt consolidation could be a sign of people taking control of their finances in the months leading up to Christmas.