One in five (18%) of those who have had to remortgage onto a higher rate since Q4 2022 and the second quarter of this year have ‘poor’ or ‘very poor’ financial resilience, compared to 12.6% of those who have yet to refinance.

This data is according to Hargreaves Lansdown’s latest analysis, which shows that around 1.5m people will need to remortgage throughout this year.

Surplus income for households who have remortgaged over this period is £315, which is £95 lower the level among households who have yet to remortgage.

However, data found that more than half of renters (54%) score ‘poor’ or ‘very poor’ for overall financial resilience.

While interest rates are expected to fall to 4.1% by Q2 next year, in Hargreaves Lansdown’s higher interest rate sensitivity scenario, the financial resilience of households remortgaging over the next year would be hit far harder.

In the higher base rate scenario, data shows that the average household refinancing between the third quarter of this year and the second quarter of next year would see their monthly mortgage costs rise by £125 compared to £65 in our baseline scenario.

The financial resilience of renters has improved by 3.7 points since the pre-pandemic period, in line with the national average.

However, renters have seen their ‘arrears’ and ‘subjective evaluation of debt position’ indicators fall by 3.5 and 10.0 points, respectively, over this period.

Hargreaves Lansdown head of personal finance Sarah Coles says: “Remortgaging remains a horrible headache, but the pain is easing slightly, and it’s nothing compared to the agony renters are enduring.”

“Around 1.5m people have to remortgage at some point in 2024, and it’s going to hurt. Most are moving from deals costing them less than 3%, to rates which were just shy of 6% throughout most of June and July (average rates on 2-year fixed rate mortgages according to Moneyfacts). As a result, over the next 12 months, they’re likely to be carrying far less affordable debts.”

“Those who have already remortgaged have seen a major blow to their resilience, with an average of just £315 left at the end of the month – compared to £401 overall, and £410 among mortgage holders who haven’t yet had to remortgage. It means almost one in five of them are facing tricky financial times – scoring ‘poor’ or ‘very poor’ for overall resilience.”