Oh, the days when it was simple and quick to obtain a cheap remortgage once a homeowner’s current mortgage deal ended.  A borrower simply went to the lender and told them whether they could afford a new remortgage or not.  They could self-qualify for a low interest rate and be assured they had locked into another year or more at an affordable rate.  Lending has changed in the face of the credit crisis that rocked the global economic stability and that of the UK.  Now in an attempt to make borrowing more responsible borrowers will be hard pressed to find an interest only deal, they will be required to pass new stricter lending guidelines and a stress test to assure they can afford a remortgage even when interest rates rise.

The Mortgage Market Review (MMR) that was put into place in April requires that lenders counsel borrowers as to their options and they are required to share more intimate details concerning how they spend their income and how they save.  The data supplied to borrowers for a remortgage or mortgage loan will be used to determine the risk of lending both now and in the future should all things stay the same but interest rates increase.  It protects borrowers, lenders and the economy from irresponsible lending and irresponsible borrowing.

The MMR is expected to slow down the strong demand recently experienced in the lending industry.  Such a calming to the rush that was building will be seen as a natural balancing to the housing market and the lending industry.  This might quench the thirst of economists and other financial experts eager for the Bank of England to raise the current standard base interest rate from its historical low level of 0.5%.

Homeowners should stay alert to changes in the interest rate offerings for remortgages and be prepared to react with plenty of time to compensate for the longer processing times brought about by the MMR.