New research has found that one in seven homeowners trying to remortgage in the past two years has failed to secure another deal due to tighter affordability rules and issues with credit records.
According to the Nottingham Building Society, missing out on a deal with their existing lender or a new one meant higher monthly costs for 26% of those who could not remortgage, with 8% seeing a substantial rise in payments.
Its study found that one in four who could not remortgage was turned down either because they did not fit new affordability rules or because their credit record had deteriorated. However, 11% said they were turned down for being too old.
Data from the Council of Mortgage Lenders shows the number of remortgage loans was 31,000 in September with a total of £5.1 billion, up from 27,900 and £4.3 billion the previous year.
The current average standard variable rate is 4.5%, while average two-year fixed rates at 75% loan-to-value are 1.91% and 3.03% at 90% loan-to-value.
On a £200,000 loan, someone moving from 4.5% to 1.91% could potentially save as much as £430 a month, the building society said.
Ian Gibbons, senior mortgage broking manager for Nottingham Mortgage Services, said: “With rates remaining low it is potentially a good time to remortgage to a new deal but unfortunately it is not always that simple.
“With more than a quarter of those who have tried to remortgage in the past two years not being able to secure a new deal it is clear that homeowners need to think carefully and research the market.
“People’s circumstances change and seeking help from a broker to get an independent view on the best deal available to a customer is a very sensible approach.”
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