Mortgage news
IS IT TIME TO REMORTGAGE?
Dale Mortgage Brokers comments on the Monetary Policy Committee's decision to retain the Bank Base Rate at 0.5% for January, which is unchanged for the 10th consecutive month.
"With many economic forecasters now firmly expecting the economy to have returned to growth, some are now expecting the Bank of England to start to increase the low Bank Base Rate that we have all enjoyed and benefitted from over the last twelve months."
The question we all want to know now is When is this likely to happen? Some forecasters still believe that the base rates will be maintained in the short term as the outlook for the wider economy is still far from clear. The Royal Institute of Chartered Surveyors are forecasting bank base rates to be raised in the second half of 2010, but others believe that rates may start to be increased as early as March of this year.
So what does it all mean for home owners?
Many would be remortgage borrowers have quite understandably been put off from switching their mortgage, as many lenders' standard variable rates have previously offered such great value in relation to any new re-mortgage products on offer. However, it is best not to be complacent as some of the smaller Building Societies have already started to increase their standard variable rates.
Other borrowers have also been put off switching their mortgage due to lower equity levels as a result of house price falls during 2007/08. This has meant that some of the best remortgage rates were out of reach due to those customers with a high loan to value which lenders' would not have considered.
The last few weeks have continued to see the main high street lenders compete for business with almost weekly rate reductions on both tracker and fixed rate products and this is good news for home movers, and in particular those who are now potentially thinking of remortgaging for whatever reason.
We have seen further encouraging news with both Nationwide and the Halifax reporting house prices increases in 2009 of 5.9% and 1.1% respectively. Although this change in house prices will not be a solution for all re-mortgage borrowers at the moment (as many will still have little or no equity), if prices do continue to rise, more borrowers will be able to take advantage of the offers out there and prevent any rapid rise in interest rates that may occur by locking into a fixed rate deal.
We are also seeing an increase in the number of mortgage products available to brokers, with the total number of deals now available reaching the 3,000 figure which demonstrates that lenders must also be feeling slightly more optimistic about the market as the wider economy improves.
The number of people remortgaging in recent months has been steady, but significantly below the levels that the market previously experienced. With change now considered more likely, we would expect more potential borrowers to start to re-examine their options in the market as we move into 2010.
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