Two-year fixed rate mortgage rates drop as competition between lenders increases
Thanks to increased competition on two-year fixed rate mortgages, this month may make a good time to consider remortgaging.
There’s good news for homeowners who are eyeing a remortgage. The average two-year fixed mortgage rate is now at 2.49%, down by 0.3% on November 2018, a rates tracker has reported.
According to the Bank of England, 50,400 consumers were approved for a remortgage in December 2018, up from November’s 48,900. However, it turns out they may have missed out on a better deal because increased competition between lenders has brought down the rates since then, according to rates tracker Moneyfacts.
Competitive interest rates mean that if your fixed term mortgage is about to expire or you’re already being charged your lender’s Standard Variable Rate (SVR), remortgaging may save you a significant sum despite the fees you’ll have to pay.
Remortgages typically increase when interest rates drop. However, such favourable conditions won’t last forever, and it’s all about finding a balance between waiting and seeing if the rates decrease any further and not waiting too long.
“Borrowers must be aware that this current lending environment is unlikely to continue indefinitely and lenders could slow down this aggressive pricing if they see fit, meaning rates may rise,” said Rachel Springall, finance expert at Moneyfacts.
This may be a good time to compare rates and secure a new deal. This is especially true for people who are remortgaging and have a considerable deposit to put on the table. Even first-time buyers may be able to get a competitive rate since there are a few 95% LTV mortgages available with rates below 3%.