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Remortgage market showing signs of recovery

The remortgage market is beginning to shows signs of recovery, according to John Charcol. 

The latest John Charcol Index shows remortgages, including product transfers, increased market share for the third month running.

In February, remortgages accounted for the majority, 51 per cent, of mortgages sold by the broker, compared to 47 per cent of purchases – down from a peak of 58.5 per cent in November.

John Charcol senior technical manager Ray Boulger (pictured) says: “Detailed analysis of the figures shows that all of the increase in remortgage activity over the last two months is due to a particularly sharp increase in buy-to-let mortgages. 

“Therefore although mortgage rates have been steadily improving over the last few months, and in the residential market there are now even decent rates available up to 85 per cent LTV – which makes remortgaging worthwhile for many more people – it is too early to be confident in an ongoing increase in remortgage activity.”

Fixed rates remained stable at a low level over the past three months, accounting for about 20 per cent of the market.

Commenting on the large differential between fixed rate and tracker mortgages for John Charcol clients, Boulger says trackers have offered better value since the middle of last year but that the risk of a hung parliament and political uncertainty cannot be ignored. 

He notes the gap in pricing between fixed and tracker mortgages has narrowed recently as the market reassesses the future path of interest rates, saying: “If this trend continues fixed rates may well come into the reckoning in the not too distant future.”


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