Searches for remortgage deals in Britain surged 37 per cent year on year in October, as homeowners rushed to review their borrowing before an expected rise in interest rates.
The latest data from mortgage technology firm Twenty7tec shows the market is increasingly driven by existing homeowners rather than new buyers. In October, 1,825,082 mortgage searches were recorded, up 12 per cent on the same period last year.
Homeowners dominate the market
Residential remortgaging accounted for 820,865 of those searches. In contrast, residential purchase searches reached 592,572, down 4 per cent month on month and 1 per cent year on year. The buy-to-let sector faced more headwinds, with total searches dropping 7 per cent both monthly and annually to 273,330.
The trend aligns with Bank of England figures showing remortgage approvals rising to 42,600 in September while house purchase approvals dipped to 53,400. The effective interest rate on newly drawn mortgages has reached 4.63 per cent.
A rush before rates rise
With the Bank of England widely expected to lift Bank Rate to 4 per cent today, its first rise in more than three years, homeowners on tracker and variable deals face higher payments. About 800,000 fixed-rate mortgages priced at 3 per cent or below are expected to expire each year on average until the end of 2027, pushing more borrowers into the remortgage market. The Government’s £4.7 billion Your First Home scheme, which aims to support 70,000 buyers with deposits as low as 2.5 per cent, may help first-time buyers, but for existing owners the message is to shop around early.
What borrowers should do
Homeowners coming off fixed deals face a market very different from the one they borrowed in. Around 800,000 fixed-rate mortgages priced at 3 per cent or below expire each year on average until the end of 2027, and the effective rate on newly drawn mortgages has reached 4.63 per cent. Brokers advise starting the remortgage search three to six months before a deal ends, since many lenders let borrowers lock in a rate ahead of time. Tracker borrowers feel a Bank Rate rise immediately, while fixed-rate borrowers are protected until their deal expires. Comparing the whole market, including fees as well as rates, matters more than ever when the gap between deals is measured in hundreds of pounds a year.
