Is it time to remortgage?

Nia Williams

February 8, 2010

Analysis from shows that borrowers on the majority of SVR deals would be wise to consider switching, especially as other lenders are expected to increase their SVR rates.

Hannah-Mercedes Skenfield, mortgages channel manager at, said: “Since the start of the credit crunch the remortgage market has, essentially, been closed. Most borrowers on SVR had been enjoying a better rate than that on offer to new borrowers and the increasing of LTV criteria meant people couldn’t remortgage anyway. Over the last month or so we’ve seen the market shift. SVRs have increased, rates for new borrowers have been falling and we’ve seen an increase in the availability of mortgages even at higher LTVs. The remortgage market is open for business once again.”

Hannah-Mercedes Skenfield, added: “These figures really show that for many people, now is the time to switch. The prospect of an arrangement fee can be off putting, however, our analysis shows that even when taking the fee into consideration and provided you have at least 25% equity in your property, the vast majority of SVR deals do not compete with the top fixed rates. Taking time to work through the sums involved when deciding whether or not to fix your mortgage is crucial. Fixed rates aren’t likely to get much lower in the near future, so the quicker you act the better.

“In some ways the case for a tracker mortgage over an SVR deal is even more compelling than for a fixed rate. The only reasons you might consider staying on an SVR over a fixed rate is either your current SVR is cheaper than the best fixed rate deal or that you believe SVR rates will remain low for some time to come – recent increases show this may no longer be the case for many borrowers. Neither of these arguments really applies to tracker mortgages, with only seven cheaper SVR deals than the best tracker it is unlikely you are making a saving by remaining on your current SVR deal. And if SVRs are going to remain low for a while, then the same can be said of trackers. In fact the added value of a tracker is that lenders can’t re-price them independently of a static Base Rate – something which is already happening with SVRs.”

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