Increased competition between lenders has lowered mortgage rates although 8% fewer homeowners have opted for a remortgage.

According to the Lloyds Bank over the last six months to the end of June the number or people remortgaging their home are 194,000, lower by 8% compared to previous periods.

In addition lenders have said the number of mortgages approved for borrowers in the past three months to September has dropped for the first time in two years.

The tougher affordability rules introduced in April may have deterred people from remortgaging unsure if they would qualify. Homeowners may also have difficulty if their income has fallen or property value has decreased.

Without family help to upsize, the only option is for remortgage buyers to stay in their existing home and continue saving more for a bigger deposit.

Mortgages at their lowest rates

Lenders have been reducing their rates to all borrowers in the market including first time buyers, home movers and remortgage buyers. There has also been a fall in homeowners missing their mortgage repayments.

As lenders strive to meet their lending targets, borrowers are benefiting with a greater availability of mortgages on the market with lower rates.

There is greater competition between banks and building societies to attract new customers by reducing their mortgage rates. Lenders are expecting tighter profit margins later this year as rates are reduced further.

For older equity release mortgage buyers, fixed rates can typically be secure from interest rates of 5.9% upwards without any evidence of earnings which is important for borrowers with only retirement income.

Moving to a fixed rate mortgage

Currently the variable rate of interest charged at the end of a discounted or tracker rate offer are low offering little incentive to remortgage to a fixed rate.

This means homeowners are not in a hurry to remortgage until it is likely that interest rates are going to rise.

Fixed rate mortgages have increased in popularity in recent years. According to the Council of Mortgage Lenders (CML) in 2010 50% of mortgages were fixed rate rising to 69% in 2012 and 83% in 2013.

For first time buyers and home movers, to manage their mortgage costs they should consider a longer term fixed rate of 3 years or 5 years.

What are your next steps?

Talk to our London City Mortgage brokers for advice if you remortgage your existing home and want the best mortgage deal or release capital, buying your first home, moving home or are a buy-to-let investor.

For older homeowners releasing equity from your property, our LCM mortgage advisers can recommend the lifetime mortgage, accessing wealth to improve your quality of life or even reduce inheritance tax owed by your beneficiaries.

Learn more by using the equity release mortgage calculator, mortgage cost calculators, and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.

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