Homeowners have had little to be excited about in the remortgage lending arena in the first half of the year.  Lending remained tight and interest rates were less than desirable to bring anyone out looking to make a switch.  When lenders started raising their standard variable rates (SVR) it was thought that homeowners that had failed to remortgage when their mortgage deal ended would run for a new deal but demand remained weak.  Homeowners were content to stay on a lender’s risky SVR rather than get the security offered by a remortgage.  Remortgages were not offering what homeowners wanted or the lenders were keeping the average homeowner shut out of the possibility of a new deal due to tight lending criteria.

A few months ago the government stepped in to try and keep loans flowing to those that needed it at affordable rates.  They started their Funding for Lending programme for lenders.  Lenders could borrow from the government programme rather than getting funding for their loans from the global lending market.  That would mean more funding available and at cheaper rates.  The programme has appeared to have made an impact already.  Lenders have been offering historically low mortgage and remortgage deals.  Some fixed rate deals with long terms have been below 3%.

The cheapest deals have been reserved for those with the ability to meet low loan-to-value levels such as 40% but they also have had high fees with them.  The good news is that there are deals with slightly higher interest rates being offered with no fees or low fees and free incentives included as well.  Both fixed rates and trackers are very attractive.

The first part of the year may have been less than appealing for homeowners and buyers when it came to remortgage and mortgage lending but now there is a change in the wind and deals are looking better.  Those that were less than inspired a few months back should reconsider and go shopping now.