Remortgaging applications surged 17% in February, the Mortgage Advice Bureau has reported.
It says the rise in activity has been fuelled by the continuing drop in fixed rates, with average two-, three- and five-year rates falling by 0.11% or more since January.
Since the Funding for Lending Scheme was introduced in August 2012, average fixed rates have fallen by more than 0.5% across the board: two-year rates have shed 0.57% to 4.11%; three-year rates are down by 0.66% to 4.36%; and five-year rates have plummeted by 0.73% to 4.14%.
Unsurprisingly, the popularity of fixed rate remortgage applications in February was an overwhelming 91.7%, the same high figure as in January.
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “Remortgaging in the current climate is not just a practical move but one that makes increasingly good financial sense.
“In simple terms, we have never seen fixed rate usage so high. With so little to choose between two- and five-year rates, more people are also opting for longer fixed terms as the fees on some shorter deals outweigh any differences in rates.
“Where products are concerned, the picture is changing on an almost daily basis, with lenders pricing to attract borrowers’ interest and reacting to the growing rate war.
“On current form, a new product that appears to be a market-leading offer can be overtaken in as little as 24 hours.
“Brokers will be crucial to increasing lending volumes over the next few months, as smaller lenders are limited by the reach of their branches and staffing resources.”
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