Remortgaging activity in the UK is still subdued, despite the fact that standard variable rates (SVRs) have generally been higher than fixed rates since August 2011, according to new research from Lloyds TSB.

Historically, remortgage activity has typically been driven by borrowers replacing their fixed home loans at the end of their term, to avoid moving on to an SVR. This is because SVRs, on the whole, were more expensive and brought uncertainty over future monthly payments. However, this changed in recent years when interest rates fell to an all-time low.

“With SVRs at historically low levels, many homeowners have actually found their mortgage payments have reduced at the end of their term and the incentive to remortgage has been reduced,” said Stephen Noakes, Mortgage Director at Lloyds TSB. “However, as we start to see fixed rates dropping, prudent borrowers taking stock of their home loans could benefit from their monthly payments falling further.”

According to Lloyds TSB, even though SVR rates have generally been higher than fixed rates since August 2011, remortgaging activity on the whole has seen little movement, averaging 29,700 per month (37% of total mortgage lending). 

The lender believes that borrowers may no longer be better off staying on SVRs, given the recent fall in fixed rates.