Surge in remortgage applications expected

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Over £26 billion of mortgages will mature in October, according to analysis by the Yorkshire Building Society.

This represents the biggest mortgage maturity period of the year, the mutual said.

Findings show thousands of home loan deals will be coming to an end during the maturity peak, meaning borrowers could be starting to look for a new deal now.

Many homeowners, particularly those maturing from a five-year fixed rate, could save money on their monthly repayments by remortgaging thanks to current competitive interest rates and increased house prices across much of the UK since 2014 benefitting their loan to value (LTV).

As an example, a homeowner who initially borrowed 85% of a £200,000 property in October 2014 at a market average five-year fixed rate of 4.25% could now benefit from an LTV of 65% and take advantage of the Yorkshire’s current five-year fix of 1.54%, which would save £201 a month in repayments.

Charles Mungroo, senior mortgage manager at the Yorkshire Building Society, said: “With such a large number of mortgage deals coming to an end in a few months we expect to see a surge in remortgage applications as many homeowners start considering their next steps.

“Borrowers maturing from a five-year fixed rate in particular may be pleasantly surprised to see they potentially have more competitive rates available to them now, especially in areas of the UK where house prices have risen.

“All our mortgage offers are valid for six months so homeowners could choose a new rate now and have the reassurance their home loan is arranged when their current deal ends in October.”

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