Could we be set for the largest two-month maturity period since 2012?

According to recent data from CACI, around £17bn worth of mortgages in the UK are set to mature in September, with another £18bn in October.

This makes the two-month maturity period the largest since 2012.

Remortgaging

Analysis from Yorkshire Building Society suggests that homeowners looking to remortgage could begin to see their monthly repayments fall. This is due to reduced mortgage rates and increased house prices benefiting mortgage loan-to-value (LTV).

For example, a homeowner in London who initially borrowed 90% of a property worth £250,000 in July 2015 at a market average rate of 3.60% could benefit from a reduced LTV of 72% when remortgaging. This is due to house prices in the region rising by 14.9% during the two-year period.

Moving to Yorkshire Building Society’s current two-year fix of 1.14% for borrowers with a 75% LTV could save £255 per month in repayments. This could amount to more than £3,000 per year.

Surge

Charles Mungroo, Mortgage Manager at Yorkshire Building Society, noted: ‘With such a large proportion of mortgage deals coming to an end in September and October we expect to see a surge in remortgages soon.’

‘Homeowners should be planning ahead long before their fixed period ends to ensure they get the best option. Longer term fixes may appeal to borrowers who want to keep their monthly repayments as low as possible whilst also being able to budget for the next five years. All our mortgage offers are valid for six months so customers have reassurance that they’ve secured a great rate but they also have some breathing space if they have other priorities at the moment, such as a summer holiday.’[1]

[1] http://www.propertyreporter.co.uk/finance/the-biggest-two-month-maturity-period-since-2012-due-to-hit-this-autumn.html