Remortgaging is soaring as borrowers race to secure deals on competitive rates, according to a new survey by Spicerhaart Financial Services…

The survey revealed that over a third of consumers are choosing to remortgage, an increase of over 43% since March last year.

Graph 1.  Proportion of borrowers remortgaging March 2007 – February 2008

Steve Cox, Operations Director of Spicerhaart Financial Services, comments: “Following the credit crunch we have seen a steady increase in the number of people choosing to remortgage their property, using the cash to improve their existing property or pay off debts.  It is also attributable to consumers who are coming to the end of fixed rate mortgages, as they look to secure competitive deals”

In a further effort to capitalise on the lower rates, there has also been an increase in take up of long term fixed rate products.  Products of more than four years account for almost a quarter of all deals, the highest level since February last year and longer term fixed (of between seven and 25 years) are at their highest level ever (graph 2)

Steve Cox continues: “Due to the unpredictable nature of the forthcoming months, borrowers are looking to achieve some security and fix their monthly repayments.  Though the base rate held this month, interest rates are still relatively low and consumers believe that choosing a long term fixed mortgage now will pay dividends in the future.  By choosing these products borrowers are ensuring their mortgages are set at the current lower rates for the long term.”

Graph two: proportion of long term fixed rate mortgages