Mortgage firm Legal & General predicts that SVRs falling into line with base rate cuts will hit the remortgage market hard.

Following analysis of L&G’s mortgage purchase index for the final quarter of 2008, the company claims that there were 17% fewer borrowers taking up variable rate mortgage products than in the previous quarter.

L&G housing director Stephen Smith said:

“Rates are now at such spectacularly low levels that the incentive to remortgage for borrowers may be vastly reduced.

“We think, as a result, that the remortgage market will take a big hit next year.”