Wednesday 07 March 2018

Impact of Article 50 on the remortgage market

Author: Andrew Page


Although the exact terms of Brexit are yet to be decided, Britain’s decision to leave the EU is almost certain to have an impact on the country’s property market. From demand for housing and the cost of property to the availability of financing, the result of the referendum could have serious consequences for all of us.

For those who already own a property and have a mortgage, it’s the remortgage market that matters most. Remortgaging a property is great way to streamline finances and release equity from a home or buy to let property, so the health of this sector has a big impact on those with existing investments. As with many aspects of the UK economy, the triggering of Article 50 is likely to impact the remortgaging industry. Finding out exactly what this means for you could help you to save money and make the most of your property investments in the coming years.


Most people tend to remortgage when their initial fixed term period of interest comes to an end. In many cases this is two, three, or five years after they first took out their mortgage. Remortgaging gives property owners the chance to save money on their repayments and find the best possible deal for their financial situation. As Money Saving Expert puts it:

“For most people, their mortgage is their biggest financial commitment. And it follows that streamlining the largest debt can produce the largest saving.”

Other people choose to remortgage in order to release money for a home renovation, an extension, a second home purchase or another major investment.

Article 50

In the run up to the triggering of Article 50 at the end of March 2017, remortgaging in the UK levelled off at £5.2 billion. Remortgaging as a percentage of the lending market fell four per cent between February and March 2017, down from 29% to 25% in the lead up to Article 50.

This was largely caused by the fact that many homeowners feared that Brexit would negatively impact on UK property prices. Property investors wanted to see the effect of triggering Article 50 before they decided whether or not to remortgage their homes.

Homeowners fix their rates for longer

Another remortgaging trend we’ve seen emerging since the triggering of Article 50 is that increasing numbers of homeowners are opting for five-year fixed terms. This is because in November the Bank of England put its base rate up from 0.25% to 0.5%, the first rise in ten years. This had a knock on effect on mortgages, making repayments more expensive for many and causing a number of lenders to withdraw their cheapest products from the market. Many homeowners remortgaging this year have decided to opt for five-year fixed rate deals in the hope that it will protect them against future rate rises, for the time being anyway.

Although we don’t yet know exactly what impact Article 50 will have on the remortgaging market, our experts can still advise you on the best rates and the best options for your financial situation. Take a look around or get in touch with a member of our team to find out more.

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Written by: Andrew Page