Experts are encouraging borrowers to pay attention to the lending market. Home buyers and homeowners should be made aware that the once historic low interest rates that came about during the pandemic lockdown are now rising. The ability to take advantage of the lowest mortgage and lowest remortgage deals could be disappearing. 

Since historic low interest rates have come about during times of economic stress such as the last recession and the impact of the current pandemic, no one would want to see the interest rates lower again. The new normal for borrowers should be to see interest rates slowly rising from lenders. They should also expect to see borrowing demand higher as relief efforts come to an end such as the end of the mortgage payment holiday and stamp duty cuts.

Tightening of lending is also a possible outcome. This could put some out of reach of opportunities, such as a homeowner unable to remortgage to take advantage of substantial savings and security from rising rates with a fixed interest rate deal.

According to a recent report, the average two year interest rate for mortgage lending is at 2.83%. Comparing it to the March level of 2.43% when the pandemic began to take its toll on the economy and then the average rate of 2.02% in June, it is easy to see the changes that took place and what is expected in the months ahead as rates slowly increase.

Borrowers should also be aware that the processing of mortgage and remortgage deals can be slower than before the pandemic took hold on businesses. With Covid-19 cases rising in the UK, it should not be overlooked that with little to no notice a lender’s processing time could be compromised. Therefore, home buyers and homeowners should not consider waiting on the fence as a proper response to securing a low interest rate deal. Things are very fluid in the lending market and changes are happening day in and day out.

To take action now, experts suggest borrowers search online with brokers and lenders. For instance, a homeowner could search online with remortgage brokers and in a matter of minutes have several possible remortgage quotes in hand. Once the easy and quick research is done online, the next steps toward securing the best deal for the borrower can be taken.