Homeowners think 2013 a good year for remortgaging

Many homeowners are hopeful of a better mortgage deal. Picture: Jayne Emsley
Many homeowners are hopeful of a better mortgage deal. Picture: Jayne Emsley
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Almost a third of homeowners would consider remortgaging in an effort to find any potential monthly saving, according to a survey published today.

Research found Scots would save an average of £135 on their monthly bills, and one in five mortgage payers believed that 2013 could be a good year for new deals.

The majority – 69 per cent – are happy with their current payments to lenders, and a third of those homeowners believe they are already on the lowest possible interest rate with no room for improvement.

The Bank of Scotland survey found that half of owners were unaware that fixed interest rates for mortgages have been lower than standard variable interest rates for more than a year.

The most recent figures from the Council of Mortgage Lenders (CML) showed a slight monthly increase in remortgage loans in January, but the numbers were down nearly a quarter from a year earlier.

Laurence Mann, head of mortgages at Bank of Scotland, said: “Standard variable rate ­mortgages have been at historically low levels for quite some time, so it is no surprise that many homeowners haven’t considered moving from them.

“With fixed-rate mortgages falling, and some good deals expected on the market this year, now is the time for borrowers in Scotland to consider the benefits of remortgaging.”

Citizen’s Advice Scotland said there is so much financial pressure on consumers that remortgaging and restructing debt has become appealing to many.

But a spokesman cautioned: “Remortgaging is a huge step. It can be appropriate for some people, if the circumstances are right, but it’s certainly not the best solution for everyone.

“It depends on so many variables and on your specific specific circumstances. What is vital is that you don’t take any step of this nature without a great deal of thought, and without taking independent financial advice.”

In January, the CML reported that £3 billion was advanced for remortgaging and that lending remained subdued. It fell sharply in 2012 but may have stabilised, it said.

Allan Radlow, principal partner at conveyence firm McVey and Murricane, said less competition between lenders to offer remortgages has made it harder for consumers to get good deals in the first place.

He said: “An example might be where a family had taken consumer loans secured on their house. Even though that family might satisfy a lender’s requirements income-wise for a remortgage, the impact of the consumer loan on available equity may prevent the remortgage from completing.

“Lenders are concerned about two main factors: the ability of the borrower to pay the mortgage, and the availability of sufficient equity in a property to cope with further fluctuations in the housing market.”

Mark Hordern, chief executive of Glasgow Solicitors Property Centre, said there were so many people waiting for the economy to improve before trying to sell their homes that there was little point in remortgaging.

He said: “Unless your mortgage is a very low proportion of your house value, you’re not going to get a better deal, and you’re likely to find that the value of your mortgage relative to your house price is less good than it once was.”