Borrowing is becoming more expensive at the same time that consumers have less to pay debt.  Lenders are raising their interest rate levels on mortgage and remortgage offerings and some have announced that they are increasing their standard variable rate.  This is pushing the need for a remortgage higher but there are many that cannot get a new deal.  Equity levels have dropped for many while other homeowners have not had the opportunity to pay long enough on their mortgage debt to keep up with declining property levels.  This has pushed those homeowners into negative equity when their debt out valued their property.

To get property values boosted there will be a need for more home buyers to purchase.  According to a new study by RBS the ability for first time buyers to purchase has improved.  The first issue of the Ability to Buy Index revealed that there was an 1 per cent increase in the ability for first time buyers to purchase in 2011.  What is holding back many first time buyers is still the ability to come up with a deposit.  The same low interest rates on borrowing are holding back the ability to earn on saving deposits.  It is estimated that the average first time buyer will have to save for 35 months to gather a 10 per cent deposit for a property.

The Bank of England’s Monetary Policy Committee (MPC) is not expected to increase the standard base interest rate throughout 2012.  However, it does not mean that the offerings from lenders will remain next week as cheap as they are today.  To get the best deal on borrowing in either a remortgage or mortgage it is suggested that borrowers be willing to shop around for the best deal they can find.