The house mortgage market is now getting tighter as the threat of an interest rate increase now seems like quite a possibility within the next few months.  The data coming from the mortgage market and posted by the Council of Mortgage Lenders is supporting this as well.  According to the CML, mortgage borrowing during the month of May leveled off to £16.5bn.

The total for May was equal to the amount approved during the month of April and more than 10% higher than the same month last year.

The data from May suggests many were listening to Bank of England MPC members when the issue of interest rates came up during the last monthly meeting.

Warnings of an interest rate increase have been flying through the airwaves for a few months now and fundamental economic factors seem to be in place now for long enough to support an increase without causing much damage to the recovery which has taken place thus far.

Remortgages as well as buy to let property type mortgage approvals have also leveled off due to the recent news.  Many house owners are scrambling to get a fixed deal if they are in a SVR situation currently.  At the same time, new house buyers are applying for higher loan to value percentages and being met with roadblocks along the way based on the tighter lending rules.

The Mortgage Market Review is making it more challenging for most to be approved for a mortgage now.  Banks have tightened the process and are now asking for stronger indications of a borrower being able to pay back the loan even if tough times befall them.  The average house mortgage in the UK totals more than £130,000 which is causing many to re-evaluate their ability to pay back a mortgage in the long run.  There are many fine deals with banks still available.