The Great Base Rate Rise Fear Is Driving Up Levels Of Remortgaging
- By Howard Ogollegos
- Published 09/24/2011
- Real Estate
- Unrated
The numbers of Brits remortgaging is set to rise in 2011 according to industry experts. The prospect of the Bank of England Base rate rising from its record low level of 0.5 per cent as well as rising inflation should encourage more Brits to switch their home loan this year, with remortgage levels already having increased by 28 per cent in the last twelve months.
With increased speculation that the Bank of England may raise interest rates it is no surprise that borrowers are increasingly turning to fixed rate remortgage deals. The Daily Telegraph recently reported that remortgages are up 5 per cent already in the first two months of 2011 and by over a quarter since the same time last year.
In February this year there were a little over 26,100 new remortgage deals arranged, just slightly short of the 16-month high from November 2010. With the Bank of England's Monetary Policy Committee intimated strongly that it will have no choice soon but to raise interest rates, it is small wonder that the fixed rate deal is fast becoming a very popular option. 0.5 per cent rates can't last forever.
Several experts in the industry have commented, stating that we can definitely see the health of the UK mortgage market increasing, which is good news given that the past couple of years have been a very difficult time for the Financial Services industry. All seem to be in agreement that we will see an increase in the base rate by the final quarter of 2011, which is urging many mortgage applicants to fix their repayments.
Many mortgage advisers fe
el that the base rate increases will cause for the remortgage market to boom even further in the latter part of this year. Most organisations within the Financial Services industry appear to believe that the way that inflation and interest rates are predicted to go will help the UK markets to recover much more quickly than they have been in the past few months.
And, with rates set to rise, 64 per cent of mortgage brokers said that they believed fixed rate remortgage products were better value for clients and were more popular. The research also found that 85 per cent of all mortgage intermediaries believed that lenders' appetite for remortgage business had stayed the same or increased in the last six months.
Directly authorised intermediaries feel the remortgage market has shown signs of life in recent months and will continue to grow, thanks to a number of market influences, said Phil Whitehouse, head of The Mortgage Alliance.
Mr Whitehouse added: "It has been predicted that interest rates could rise as soon as May and, if this is the case, it will have a big effect on the remortgage market and the levels of remortgage business being written by intermediaries."
The outlook of mortgage brokers has recently also been reinforced by figures from lender First Direct. The bank found that 41 per cent of homeowners looking to remortgage in the next year would definitely do so if their payments rose by at least GBP 100 per month.
Of course, there are still many who would prefer to stay on a variable rate and take advantage of interest rates while they are low, but it would seem that the majority of people are looking to keep to a more predictable budget.
With increased speculation that the Bank of England may raise interest rates it is no surprise that borrowers are increasingly turning to fixed rate remortgage deals. The Daily Telegraph recently reported that remortgages are up 5 per cent already in the first two months of 2011 and by over a quarter since the same time last year.
In February this year there were a little over 26,100 new remortgage deals arranged, just slightly short of the 16-month high from November 2010. With the Bank of England's Monetary Policy Committee intimated strongly that it will have no choice soon but to raise interest rates, it is small wonder that the fixed rate deal is fast becoming a very popular option. 0.5 per cent rates can't last forever.
Several experts in the industry have commented, stating that we can definitely see the health of the UK mortgage market increasing, which is good news given that the past couple of years have been a very difficult time for the Financial Services industry. All seem to be in agreement that we will see an increase in the base rate by the final quarter of 2011, which is urging many mortgage applicants to fix their repayments.
Many mortgage advisers fe
And, with rates set to rise, 64 per cent of mortgage brokers said that they believed fixed rate remortgage products were better value for clients and were more popular. The research also found that 85 per cent of all mortgage intermediaries believed that lenders' appetite for remortgage business had stayed the same or increased in the last six months.
Directly authorised intermediaries feel the remortgage market has shown signs of life in recent months and will continue to grow, thanks to a number of market influences, said Phil Whitehouse, head of The Mortgage Alliance.
Mr Whitehouse added: "It has been predicted that interest rates could rise as soon as May and, if this is the case, it will have a big effect on the remortgage market and the levels of remortgage business being written by intermediaries."
The outlook of mortgage brokers has recently also been reinforced by figures from lender First Direct. The bank found that 41 per cent of homeowners looking to remortgage in the next year would definitely do so if their payments rose by at least GBP 100 per month.
Of course, there are still many who would prefer to stay on a variable rate and take advantage of interest rates while they are low, but it would seem that the majority of people are looking to keep to a more predictable budget.
Howard Ogollegos
Howard O'Gollegos writes for JustCommercialMortgages.com the UK's No.1 site for the latest commercial mortgage rates and commercial property finance news.
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