Former Prime Minister Margaret Thatcher passed away yesterday.  Many will remember her as a great leader and for key roles she played at introducing change.  Few homeowners will realize that she is credited with the current borrowing opportunities for gaining a cheaper interest rate through remortgaging.

In the 1980’s exchange controls were lifted and UK capital markets were opened up which enabled a transformation of mortgage lending.  Lenders became competitive and rather than one rate being offered across the board there were fluctuations and borrowers had options of choosing between different rates and products among lenders.

Ray Boulger of John Charcol told the Telegraph “Lenders actually had to start competing for business rather than most borrowers having to decide which lender to start saving with in order to qualify for a standard variable rate (SVR) mortgage a couple of years later. Until the early 1980s most banks were not active in the mortgage market and nearly all mortgage lending was done by the much larger number of building societies which then existed. The Building Societies Association operated a cartel, resulting in most lenders charging the same rate. This of course would be illegal today!

“Until the mid-1980s it was impossible to raise capital by remortgaging and as until then nearly all lenders charged the same rate there was no point in remortgaging to get a better, or different, rate. Therefore until that time the remortgage market didn’t exist.”

Due to the influence of Margaret Thatcher the opportunity to own your own home opened to many more and the ability to remortgage for a better rate opportunity developed as well.