There is expected to be a large exodus from existing loan deals to new deals with lower rates for those that took out a fixed rate mortgage several years ago (Sam Meadows, Telegraph, January 2018).
According to Telegraph Money, more than half a million mortgages could mature in the next 12 months. It is anticipated that many of these borrowers could benefit from a reduced rate due to the affordability of current rates. A borrower on a two year fixed rate mortgage could save £50 a month by switching to a new loan at the current rates (Telegraph Money, January 2018).
It's important to be vigilant as those who do not remortgage will be moved on to the lender's variable rate, which could be significantly higher than the fixed rate loan they could have otherwise acquired (Sam Meadows, Telegraph, January 2018).
In 2016, over one million mortgages were taken out, including remortgages and new purchases, which was the largest amount since 2008.
These mortgages were heavily biased towards fixed rate at an estimated amount of 95%, with approximately 50% of those mortgages having a 2 year term.
This large surge of mortgages in 2016 will mean that 2018 is the year those two year deals will expire.
Due to the large amount of activity in the Buy-to-let sector in the lead up to the pre April 2016 stamp duty surcharge change, any two year loans will also be due to be renewed early this year.
93,000 buy-to-let loans were advanced in the first quarter of 2016, with landlords borrowing £40.6 billion which was the most since 2007.
More than £24 billion of buy-to-let mortgage debt will mature in 2018 (Telegraph Money, January 2018).
Do you need to remortgage or take out a new home loan?
Our Mortgage team here at Westminster Wealth can ensure that you receive the most suitable mortgage for your personal circumstances, needs and objectives. Contact us today.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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Half a million mortgages will mature in 2018: here's how you could save £600 a year