Remortgages on the rise due to interest rate rises

Recent figures have revealed a rise in UK consumers looking for remortgage deals as a result of the three interest rises enforced by the Bank of England since last August.

In August last the Bank of England raised the interest rates from 4.5% to 4.75%, and in November raised them by a further 0.25% to 5%. In January of this year a further 0.25% was added to the interest rate, taking it to 5.25%, which meant that those that were not on capped or fixed rate mortgages really felt the pinch.

As a result of this many people in the UK decided to seek better mortgage deals by remortgaging, and according to recent figures around 116,000 remortgages were taken out in February of this year, which reflected a rise of around 4,000 on the number of remortgages that were taken out in January.

Many have been predicting that the house buying market may be stabilizing, and this was indeed reflected by the figure for standard mortgages being taken out, which remained at around 119,000. The rise in remortgages came after the Bank of England announced the last interest rate rise at the beginning of this year, which came as something of a surprise to many people.

One UK economist stated: 'The figures are still quite robust. It takes some time for higher interest rates to have an effect so we are not ruling out falls in mortgage approvals over the next few months. But at the moment, the housing market still looks relatively healthy.'

Tom Smith
4th April 2007

 

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