Remortgages are expected to rise in the weeks and months ahead. They have been relatively steady for months as homeowners are playing a wait and see trying to decide when will be the right time to move on a remortgage. The news that house prices will fall more, that lenders are raising the rates despite an unchanged base rate, and that there is a possible rise of the base to 8 per cent is going to increase the number of remortgages in the days ahead.

House prices are expected to fall slightly as more homes come into the market. Though there are more houses coming into the market, less are being bought. The number of mortgages being approved has slowed tremendously with lenders setting criteria that is hard to meet. Supply of homes is high and demand low, so house prices will fall. As house prices fall, so will the value of homes, taking with it a good amount of the equity that had built up into homes during the boom. Because of this homeowners are going to want to remortgage before more equity is lost.

Also, there are many lenders that are raising the interest rates despite the fact that the Monetary Policy Committee (MPC) has left the base rate at 0.5 per cent. Homeowners will be shopping around to find a remortgage with a money saving rate. Some will also be looking to remortgage in the wake of the news from an economist that the rates may rise drastically within the next two years.

Economist, Andrew Lilico, with Policy Exchange believes that inflation will force the MPC to raise the interest rate many times to keep it under control. He thinks that by 2012 the base rate will go from its current 0.5 per cent to 8.0 per cent. There is no doubt that should this happen the strain on family budgets will be big. Before a small increase, or one forecasted like Lilico’s, homeowners will want to secure a remortgage with a safer interest rate. There will be more remortgages in the days ahead and that is good. The economy needs homes to be affordable for owners, not more vacant homes coming into the market.