Remortgages Increase with Warning of Rise in Interest Rate
The Bank of England recently released a report showing that there had been an increase in those obtaining a remortgage. Most of those were switching to a rival lender offering a better rate or going to a fixed rate and leaving behind a variable rate loan. What exactly pushed the increase is not known.
Many refer to the increase being due to the fact that there are many converting to their lenders variable rate that sought out a better rate once converting occurred. This of course was more attractive for borrowers since lenders had offers worth the move to a remortgage. Rates have been competitive and many lenders have been offering no application fees along with free legal work and free valuations. Others believe the increase in remortgages which started around November are due to the fear that the long-standing 0.5% base rate will soon be increased by the Monetary Policy Committee. Rising inflation will be the direct cause of the increase in the rate. Mortgage brokers have welcomed the warning the Bank of England may be looking to raise the bank interest rate. According to the Bank of England’s executive director of markets, Paul Fisher, who also holds a position on the Monetary Policy Committee, the policymakers are seeking to raise rates to around 5%. This news brought a resurgence of borrowers to the market seeking to secure fixed rates on the current historically low standard base rate.