Potential mortgage savings increase by 50%

15th February 2016

According to new research from Halifax, fixed-rate mortgages fell to their lowest levels in 2015. Meanwhile, the standard variable rate remained static, so potential savings for borrowers have improved significantly over the course of the past two years.

The average interest rate on a new fixed-rate mortgage has fallen a further 0.59% over the past 12 months, while the standard variable rate remained flat. As a result, the average fixed rate now stands at 2.66% compared with the average standard variable rate of 4.49. Consequently the amount homeowners could save by switching to a fixed-rate deal has increased by 50% over the past two years.

The growing gap between fixed rates and standard variable rates appears to have helped improve remortgaging’s share of all new mortgage lending from 29% in August 2012 to 32% in November 2015. However, remortgage growth remains far below that seen in the gap between fixed and variable rates.

Craig McKinlay, mortgages director at Halifax, said: “Whilst remortgaging activity has picked up in the last year, this is only in line with new loans. As a result, remortgage activity’s share of all lending has remained relatively subdued, especially when compared to its strength in 2008.

“Without the concern of a base rate rise in the immediate future it seems borrowers’ appetite to remortgage has been dulled, meaning that some could be missing out on significant savings.”


*2 year fixed with TSB 1.09% then 3.59% - APRC is 3.3% Max LTV is 60%. Quoted on 27th May 2020.