Remortgage – should you consider finding a better deal?
With a number of interest rate hikes in a short space of time, and with experts predicting that there may be more to come, many consumers are wondering whether now might be the right time to consider remortgaging in order to find a better value and more affordable deal on their mortgages.
Many consumers have seen their mortgage repayments rocket over the past few months, as interest rates have been pushed up by the Bank of England – and for many another interest rate hike could mean that they are no longer able to manage their monthly repayments.
In August 2006 the interest rate in the UK stood at four and a half percent, but during that month the Bank of England announced an interest rate hike of a quarter of a percent, which pushed up the interest rates to four and three quarters of a percent.
In November the Bank of England pushed up the interest rate again by a further quarter of a percent, taking it to five percent. And in January this year yet another interest rate hike of a quarter of a percent took the interest rate to five and a quarter percent.
Experts now think that another interest rate hike is imminent, and if it goes up by the same amount as the previous ones this would take the rate to five and a half percent – a full one percent more than it stood just six months ago. With this in mind many are now rushing to try and find a better solution in terms of mortgage repayments.
However, making things more difficult is the fact that a number of lenders have now suspended fixed rate mortgage deals because of the sudden interest in this type of mortgage stemming from the interest rate rises.
Anyone considering remortgaging at this stage should compare the different deals still available from a range of lenders, and should ensure that they do their research to see which mortgage will benefit them in both the short and the long term.
Tom Smith
6th March 2007
More Information:
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How have Britons financed the billion of pounds spent on home improvements this year? Mostly through personal loans, although other forms of payments have been used as well.
- For those with good credit, a mortgage in decent standing, and a relatively (depending on the bank's definition) sizeable difference between a home's worth and the balance of a mortgage, a home equity line of credit may be a good option for those needing a loan
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It's very easy to sign mortgage papers and forget all about the details of the loan. As long as the monthly payments are made, many people don't give their mortgage much thought. However, as the economy fluctuates, mortgage rates do also, and substantial cost savings over the life of mortgage could be realized by refinancing.
