Join the race to remortgage
Rates are on the rise so move quickly to secure a long-term discount deal
Adapted from an article by David Byers, March 17 2018, The Times
Borrowers are scrambling in record numbers to take out fixed-rate mortgages before an expected rise in the Bank of England base rate. This month 25 lenders, including Barclays, Halifax, NatWest and TSB, raised the cost of mortgage deals, including 11 in the past week. A total of 49,800 mortgages were arranged in January, more than in any month since November 2008, according to UK Finance, the body that represents banks and other lenders.
Economists believe that the Bank’s monetary policy committee will soon raise the base rate from 0.5 per cent to 0.75 per cent, which will mean annual repayment increases for the 4.5 million homeowners on variable rate or tracker mortgages.
Shaun Church, a director of Private Finance, says “Rumours that interest rates could be on the up in a matter of months has caused borrowers to take speedy action, locking in the incredibly competitive and favourable rates available.”
A 0.25 percentage point rise would mean that someone with a 25-year mortgage of £500,000, paying the average variable rate of 4.76 per cent interest, faces paying £72.40 more each month, or £868.80 a year. The average two-year fixed deal is 2.37 per cent.
Mr Church says that far too many borrowers are still languishing on variable rates and will be sitting ducks when rates rise. “Too many people are not as on top of their finances as they could be and are paying much more than they should.”
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