There are signs that the Bank of England’s Funding for Lending Scheme is beginning to have a positive impact on the mortgage lending market.  Lenders are beginning to offer better mortgage and remortgage deals with loan to value levels that will open up cheap and affordable offers to more borrowers.  Because lenders are expected to increase their lending levels and offer cheaper deals to those with lower equity levels and lower deposit levels the demand is expected to grow over the first half of the year.

Should first time buyers return to the housing market as expected, then homeowners that have been holding back from a remortgage could gain more confidence as property values rise with higher house sale prices.  By having waited until lenders are more willing to lend to those outside the lowest risk group of borrowers, homeowners with lower equity levels will get to choose from better remortgage offers.  Despite that remortgage demand has waned behind mortgage demand it is expected to rise.

Homeowners that have had their mortgage deal end and have moved to their lender’s standard variable rate (SVR) are expected to keep seeing higher interest rates than current remortgage offers.  Some lenders could even be planning to raise their SVR in the wake of warnings of a triple dip recession and further weakening of the economy.  Yet, those seeking a remortgage should continue to see cheap remortgage deals thanks to the Funding for Lending Scheme.  Experts are optimistic that the scheme has given the boost needed to strengthen the mortgage and remortgage lending market.