Homeowners race to get homes remortgaged
11/08/2015
A large number of homeowners are racing to get their homes remortgaged before the base interest rate rises.
Figures from the Council of Mortgage Lenders showed that remortgaging jumped by 30% in June, and was at its highest level since September 2013. During June 31,600 households changed their mortgage deals, compared with 24,300 in May. Price comparison website Comparethemarket also claimed it had said it had seen a 23% spike in remortgage queries between June and July.
Many homeowners not on fixed deals may see their payments rise when the base interest rate goes up, so have taken precautions to change their mortgage plan. The Bank of England (BoE) has claimed that interest rates could increase as soon as December this year. The last time interest rates increased was eight years ago in July 2007, which means up to one million homeowners have never experienced an interest rate rise, according to the Money Advice Trust.
Paul Smee, the director general of the CML, said:
"Notable this month is the uptick in remortgage activity among home-owners, perhaps reflecting an increased desire to lock into competitively-priced mortgage deals in advance of any rise in rates.
"It is likely that people are now beginning to feel a rate rise is a realistic prospect, and not just a distant theoretical possibility."
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