Homeowners are rushing to switch their mortgage to a different deal and take advantage of low rates. But should you join everyone else?
New figures in the industry body UK Finance show remortgaging approvals jumped by 23.8% month-on-month and 11.1% year-on-year in March.
Here, we check out why remortgaging can be a savvy move and reveal the very best fixed, tracker and discount deals on the market right now.
Is remortgaging a good idea?
Remortgaging to a new deal might sound like a lot of hassle, but it can save you a lot of money a year.
If you’re visiting the end of the introductory period in your mortgage and you do nothing, you'll be reverted onto your lender's standard variable rate (SVR), which is apt to be significantly more expensive.
The average SVR is 4.89% according to the financial information portal Moneyfacts. But at this time you can aquire a two-year fixed, tracker or discount mortgage by having an initial rate as low as 1.26%.
On an outstanding mortgage balance of lb200,000, reverting to some rate of four.89% means you'll have to pay lb1,156 a month. But remortgaging towards the cheapest two-year deal paying 1.26% could theoretically provide you with repayments of lb778 a month – a considerable saving of more than lb4,500 a year.
Cheapest two-year fixed-rate remortgage deals
If you want the certainty of fixed monthly repayments, a fixed-rate deal might be right for you.
Here are the most useful two-year fixed-rate remortgage deals currently available at 60%, 70%, 80% and 90% loan-to-value (LTV).
| LTV | Lender | Deal | Initial rate | Revert rate | Fees | APRC |
| 60% | Lloyds Bank | Fixed to 31/08/2022 | 1.43% | 4.24% | lb999 | 3.8% |
| 70% | HSBC | Fixed to 31/07/2022 | 1.5% | 4.19% | lb1,499 | 3.9% |
| 80% | Lloyds Bank | Fixed to 31/08/2022 | 1.63% | 4.24% | lb999 | 3.8% |
| 90% | Barclays | Fixed to 31/07/2022 | 1.78% | 4.24% | lb999 | 3.94% |
Cheapest two-year tracker rate remortgage deals
If you’re able to take on more risk, tracker deals possess the edge over fixed-rate deals at 70% and 80% LTV.
A tracker mortgage offers a rate which follows the Bank of England base rate plus a fixed percentage.
The table below shows the present cheapest two-year tracker remortgage rates available at a range of loan-to-values.
| LTV | Lender | Deal | Initial rate | Revert rate | Fees | APRC |
| 60% | NatWest | Variable to 31/10/2022 | 1.43% (BBR + 0.68%) | 4.24% | lb995 | 3.8% |
| 70% | Royal Bank of Scotland | Variable to 31/10/2022 | 1.49% (BBR + 0.74%) | 4.24% | lb995 | 3.8% |
| 80% | HSBC | Variable for just two years | 1.59% (BBR + 0.84%) | 4.19% | lb999 | 3.9% |
| 90% | Accord Mortgages | Variable (collared at 1.94%) to 31/08/2022 | 1.94% (BBR + 1.19%) | 4.25% | lb995 | 4.4% |
Cheapest two-year discounted variable remortgage deals
Alternatively, you might find a discount mortgage better for the circumstances. A discount mortgage offers a rate set in the lender's SVR minus a set percentage.
Currently, these kinds of mortgages are providing the lowest rates at 60%, 80% and 90% LTV.
The table below shows the cheapest initial rates on two-year discount mortgages on the 60%, 70%,80% or 90% loan-to-value.
| LTV | Lender | Deal | Initial rate | Revert rate | Fees | APRC |
| 60% | Cumberland | Discounted Variable for just two years | 1.26% (SVR – 3.48%) | 4.74% | lb1,999 | 4.4% |
| 70% | Leek United Building Society* | Discounted Variable for just two years | 1.99% (SVR – 3.70%) | 5.69% | lb199 | 5.3% |
| 80% | Loughborough Building Society* | Discounted variable for 2 years | 1.49% (SVR-3.85% disc) | 5.34% | lb1,499 | 4.9% |
| 90% | Loughborough Building Society* | Discounted variable for just two years | 1.74% (SVR-3.6% disc) | 5.34% | lb999 | 4.9% |
*Only on properties in Wales or England
Should you receive a fixed, tracker or discount deal?
Ultimately, deciding whether to go for a fixed, tracker or discount deal depends upon your appetite for risk and just how much flexibility there is in your budget.
Right now, two-year variable rate mortgages are slightly cheaper than two-year fixed-rate deals across 60%, 70%, 80% and 90% LTVs.
However, you should be cautious with variable rate deals. Having a discount mortgages, the rate can jump if your lender decides to change its SVR, while having a tracker deal you will be at the mercy of any rises in the Bank of England base rate.
Even a little 0.25% increase in either the SVR or Bank of England base rate could quickly make a variable rate deal much more expensive than the cheapest equivalent fixed-rate deal.
If you want certainty that you'll spend the money for same amount every month, a fixed-rate mortgage could possibly be the safest option.
Get expert consultancy in your remortgaging options
With a large number of different mortgage deals to pick from, it may be useful to make contact with a whole-of-market mortgage broker, who can assist you in finding the best one for you.
