After a long period in the doldrums, remortgaging is gradually becoming more and more popular. At L&C, October saw a 15% increase in the number of homeowners coming to us to remortgage compared to September – and this month we’re likely to see an increase again.
The Bank of England left interest rates on hold yet again last week and it’s now been 20 months that rates have remained unchanged at 0.5%. The latest inflation report, released this week, gave little away in terms of indications of when rates may rise, but it did say that inflation would remain high well into 2011.
Despite no change in official interest rates, mortgage rates have been improving over the last month or so and there are some great deals to be had for people looking to switch. We’ve seen lenders such as ING Direct and Natwest launching new fixed rate deals that offer a free valuation and free legal work for remortgages. Woolwich has recently launched its “Great Escape” deal – a lifetime tracker that comes with no arrangement fee, free valuation, free legal work and £300 cashback.
The picture from this week’s inflation report is that the outlook for interest rates is still as uncertain as it was in the summer. Over that time, we’ve seen a steady increase in the proportion of our customers that are looking to combat that uncertainty by fixing their mortgage rate.
Meanwhile, after a summer of erratic fluctuations in housing market, the overall house price trend is showing a steady fall. Mortgage lender Halifax said that “prices in the three months to October were 1.2% lower than in the preceding three months”, while Nationwide says they were 1.5% lower.
The amount of equity or deposit you have is key when it comes to getting a good deal so if you’re considering a remortgage soon, then it may be best not to put it off – falling house prices could see the amount of equity in your home fall which could mean having to pay a higher mortgage rate.
If your current deal is coming to an end soon or if you’re already paying your lender’s Standard Variable Rate, speak to one of our advisers or try our 1 minute mortgage check and see if you could save money.