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Revealed: the best remortgage rates for May 2019
Homeowners are rushing to switch their mortgage to a new deal and take advantage of low rates. But should you join the crowd?
New figures from the industry body UK Finance show remortgaging approvals jumped by 23.8% month-on-month and 11.1% year-on-year in March.
Here, we take a look at why remortgaging can be a savvy move and reveal the best fixed, tracker and discount deals on the market right now.
Is remortgaging a good idea?
Remortgaging to a new deal might sound like a lot of hassle, but it could save you thousands of pounds a year.
If you're coming to the end of the introductory period on your mortgage and you do nothing, you'll be reverted onto your lender's standard variable rate (SVR), which is likely to be significantly more expensive.
The average SVR is 4.89% according to the financial information portal Moneyfacts. But right now you can get a two-year fixed, tracker or discount mortgage with an initial rate as low as 1.26%.
On an outstanding mortgage balance of £200,000, reverting to a rate of 4.89% will mean you will have to pay £1,156 a month. But remortgaging to the cheapest two-year deal paying 1.26% could theoretically give you repayments of £778 a month - a substantial saving of more than £4,500 a year.
Find out more: remortgaging explained
Cheapest two-year fixed-rate remortgage deals
If you want the certainty of fixed monthly repayments, a fixed-rate deal could be right for you.
Here are the best two-year fixed-rate remortgage deals currently available at 60%, 70%, 80% and 90% loan-to-value (LTV).
| LTV | Lender | Deal | Initial rate | Revert rate | Fees | APRC |
| 60% | Lloyds Bank | Fixed to 31/08/2021 | 1.43% | 4.24% | £999 | 3.8% |
| 70% | HSBC | Fixed to 31/07/2021 | 1.5% | 4.19% | £1,499 | 3.9% |
| 80% | Lloyds Bank | Fixed to 31/08/2021 | 1.63% | 4.24% | £999 | 3.8% |
| 90% | Barclays | Fixed to 31/07/2021 | 1.78% | 4.24% | £999 | 3.94% |
Source: Moneyfacts. 2 May 2019.
Cheapest two-year tracker rate remortgage deals
If you're able to take on more risk, tracker deals have the edge over fixed-rate deals at 70% and 80% LTV.
Atracker mortgageoffers a rate which follows theBank of England base rateplus a fixed percentage.
The table below shows the current cheapest two-year tracker remortgage rates available at a range of loan-to-values.
| LTV | Lender | Deal | Initial rate | Revert rate | Fees | APRC |
| 60% | NatWest | Variable to 31/10/2021 | 1.43% (BBR + 0.68%) | 4.24% | £995 | 3.8% |
| 70% | Royal Bank of Scotland | Variable to 31/10/2021 | 1.49% (BBR + 0.74%) | 4.24% | £995 | 3.8% |
| 80% | HSBC | Variable for 2 years | 1.59% (BBR + 0.84%) | 4.19% | £999 | 3.9% |
| 90% | Accord Mortgages | Variable (collared at 1.94%) to 31/08/2021 | 1.94% (BBR + 1.19%) | 4.25% | £995 | 4.4% |
Source: Moneyfacts. 2 May 2019.
Cheapest two-year discounted variable remortgage deals
Alternatively, you may find a discount mortgage better for your circumstances. A discount mortgage offers a rate set at the lender's SVR minus a set percentage.
Currently, these types of mortgages are offering the lowest rates at 60%, 80% and 90% LTV.
The table below shows the cheapest initial rates on two-year discount mortgages on a 60%, 70%,80% or 90% loan-to-value.
| LTV | Lender | Deal | Initial rate | Revert rate | Fees | APRC |
| 60% | Cumberland | Discounted Variable for 2 years | 1.26% (SVR - 3.48%) | 4.74% | £1,999 | 4.4% |
| 70% | Leek United Building Society* | Discounted Variable for 2 years | 1.99% (SVR - 3.70%) | 5.69% | £199 | 5.3% |
| 80% | Loughborough Building Society* | Discounted variable for 2 years | 1.49% (SVR-3.85% disc) | 5.34% | £1,499 | 4.9% |
| 90% | Loughborough Building Society* | Discounted variable for 2 years | 1.74% (SVR-3.6% disc) | 5.34% | £999 | 4.9% |
*Only available on properties in Wales or England
Source: Moneyfacts. 2 May 2019.
Find out more:best and worst mortgage lenders
Should you get a fixed, tracker or discount deal?
Ultimately, deciding whether to go for a fixed, tracker or discount deal depends on your appetite for risk and how much flexibility there is in your budget.
Right now, two-year variable rate mortgages are slightly cheaper than two-year fixed-rate deals across 60%, 70%, 80% and 90% LTVs.
However, you should be cautious with variable rate deals. With a discount mortgages, the rate can jump if a lender decides to change its SVR, while with a tracker deal you will be at the mercy of any rises in the Bank of England base rate.
Even a small 0.25% rise in either the SVR or Bank of England base rate could quickly make a variable rate deal much more expensive than the cheapest equivalent fixed-rate deal.
If you want certainty that you will pay the same amount every month, a fixed-rate mortgage can be the safest option.
Get expert advice on your remortgaging options
With thousands of different mortgage deals to pick from, it can be helpful to speak to a whole-of-market mortgage broker, who can help you find the best one for you.
