With the Council of Mortgage Lenders reporting that around 67% of mortgage are currently on lender Standard Variable Rates, and Bank of England Governor Mark Carney’s recent comments regarding the potential for rates to increase earlier than expected, brokers are anticipating a busy period for remortgaging. Experts in the Sunday Times predicted a spike in fixed rates and urged borrowers to act now to protect themselves, perhaps by considering a longer term fixed rate. The Times highlighted however that the option to refinance may not be open to everyone, particularly those with low equity, the recently self-employed or those with an interest only mortgage. These borrowers should still be checking deals available through their existing lender as well as reviewing the market for possibilities.
The Sunday Telegraph also looked at CML figures regarding mortgage terms, revealing that 40% of loans for house purchases in April had a term of longer than the traditional 25 years, with terms of 30 to 35 years becoming much more typical. Experts warned that whilst this may make a loan more affordable in the short term, borrowers must be aware of the additional interest paid over a longer period.
Elsewhere, the Financial Times reported on an increase in divorce levels, suggesting that an improvement in people’s finances coupled with soaring house prices has allowed more couples to separate.