Remortgage Approvals Rise 25%: Why Your Deal End Date Matters

Existing borrowers were moving towards new mortgage arrangements even as house-purchase approvals weakened. September’s remortgage approvals rose from 34,000 to 42,600, an increase of approximately 25%. For homeowners approaching the end of a deal, the useful question is whether their own next mortgage decision is already being prepared.

The Bank of England’s figures, published on 29 October, put purchase approvals at 53,400, down from 54,800 in August. These are seasonally adjusted approvals net of cancellations.

The two measures moved in different directions. That provides a reason to pay attention to existing borrowers, but it does not tell us why each household sought a new mortgage or whether every application will complete.

The increase covers borrowers changing lender

There were 8,600 more remortgage approvals than in August. Using the Bank’s rounded figures, that is a 25.3% monthly increase.

The Bank’s definitions are important here. Its remortgage category covers replacement borrowing against the same property with a different lender. It does not include an existing customer simply taking a new product from their current lender.

Approvals are firm offers of credit, not a count of completed switches. The figures therefore describe one part of the refinancing pipeline. They cannot be used as the total number of households renewing their mortgage arrangements.

The relevant deadline is usually the deal end date

A two-year or five-year fixed rate can end while the mortgage itself still has many years to run. That pricing deadline is different from the final maturity date, when the remaining loan must be repaid.

For many homeowners, the immediate task is arranging the next rate. If no replacement is organised, the contract will usually move onto the lender’s reversion rate, often its standard variable rate.

Slower house purchases do not postpone that date. A household staying in the same home can still face a substantial payment decision, irrespective of whether local asking prices or transaction volumes are rising or falling.

The approvals release does not establish how much of the increase was caused by expiring deals. Willow’s practical interpretation is narrower: existing borrowers deserve a review based on their own mortgage timetable.

Where borrowing is split into separate parts, each part may have its own rate and end date. Reviewing only the largest balance could miss another approaching change. The mortgage statement and original offer should be checked together.

A product transfer belongs in the comparison

Moving lender is one route. Taking a new deal with the existing lender, known as a product transfer, is another. The growth in external remortgage approvals is not evidence that switching away is always the better choice.

A useful review puts both routes alongside the rate that would apply without a change. It considers the loan balance, fees, remaining term and features the borrower actually needs.

The existing lender may offer a competitive option with a simpler process. Another lender may offer a better overall combination of cost and flexibility. The answer depends on the available products and the case.

The FCA’s rules also allow modified affordability assessments for certain eligible switches without additional borrowing, subject to lender policy. Neither an automatic rejection nor an assessment-free move should be assumed from a borrower’s circumstances alone.

Starting early creates time to make the comparison

MoneyHelper recommends reviewing options around six months before a fixed or discounted deal ends. That is a useful starting point, although individual lenders’ application and product-transfer windows differ.

An early review can establish what is available now, what documents are needed and when a replacement could start. It also exposes issues that would be harder to address with only days remaining.

Researching ahead does not require redeeming the current mortgage immediately. The intended completion date should be checked against the existing deal and any early repayment charge.

Offer validity, reservation rules and the ability to change a selected product vary. A borrower should understand those terms before relying on an offer to cover a future expiry date.

For a household whose fixed rate ends in January, a review now can establish the intended start date for the replacement. The comparison should use the balance expected at that point, taking account of scheduled repayments or any planned lump-sum reduction.

What a rate difference means on a larger balance

Consider an illustrative £500,000 repayment mortgage with 25 years remaining. At an assumed annual rate of 6.5%, the monthly payment is approximately £3,376. At 5.0%, using the same balance and term, it is approximately £2,923.

These are hypothetical rates, not available offers or a forecast. The calculation assumes monthly payments and excludes fees. It shows why a pricing decision can matter materially on a substantial mortgage.

The payment difference is not the same as a complete cost saving. A proper comparison also considers interest, fees and the balance remaining at the end of the period being compared.

Changing the mortgage term can alter the monthly payment independently of the rate. Extending it may improve immediate cash flow while increasing interest over the life of the borrowing. Comparisons should make that trade-off visible.

What has changed since the mortgage was arranged?

A renewal is also a chance to test whether the original arrangement still fits. The borrower’s financial position may have changed even if the property and lender have stayed the same.

A business owner may now draw income differently. A salaried employee may receive more commission or have moved to self-employment. A household may have reduced its borrowing, taken on new commitments or begun planning for retirement.

These are matters to discuss before selecting a product. They may affect which lenders will consider the case, the evidence needed and the preferred balance between payment certainty and flexibility.

Preparing that evidence early also makes the discussion more useful. Updated accounts, income records or details of new commitments can help an adviser distinguish between a straightforward renewal and a case requiring a different approach to lender selection.

For example, someone expecting a substantial business payment may place more value on overpayment allowances than someone who expects to maintain a steady balance. A planned home move can also change how attractive a long fixed period looks.

The review should start with the next few years of the borrower’s life, alongside the current mortgage figures. Repeating the structure of the previous deal may be appropriate, but it should be a considered choice.

The Budget does not change what September’s data can tell us

Our earlier article on the Budget and the outlook for mortgage pricing examined how new fiscal information might feed through to borrowing costs. This release measures September, before the 28 October Budget.

It therefore cannot show a post-Budget rush to refinance or establish that lenders have responded with cheaper products. The approvals figures and the latest pricing announcements answer different questions.

For a borrower with a deal ending soon, market developments remain relevant to the options being compared. They do not remove the need to identify what will happen to that particular mortgage on its contractual change date.

Waiting for a clearer interest-rate outlook is itself a decision with possible costs. The sensible assessment is what waiting would mean under the current contract, compared with suitable alternatives available for the required start date.

Existing borrowers are the immediate priority

The most useful response is a focused review of mortgages approaching the end of their current pricing period, particularly where the balance is substantial or the borrower’s circumstances have become more complex.

The starting information is straightforward: the current balance, rate, deal end date, remaining mortgage term and early repayment conditions. Add any changes in income, expenditure or future plans.

If a borrower already has an offer, the review should establish whether it remains suitable and what flexibility exists before completion. It should not assume that a later headline rate can replace it without consequences.

MoneyHelper’s guidance also encourages borrowers to compare their existing lender’s options with the wider market and discuss payment concerns early. That remains relevant whether refinancing volumes rise or fall next month.

For Willow, the purpose of existing-client contact is to identify the next decision while there is time to assess it properly. The result may be a remortgage, a product transfer or another suitable course. The client’s timetable and circumstances should determine the recommendation.