Homeowners Look To Take Advantage Of Fixed Rates
There appears to be a rush of homeowners looking to switch mortgages to get a better deal as fixed rate loans approach record levels with Nationwide offering a 10 year fixed rate at 2.9%. January saw a huge number of homeowners looking to switch to fixed rates as they looked to save thousand of pounds off of their annual mortgage payments.
Homeowners are also overpaying their monthly payments with the mortgage providers in order to pay off their mortgages early. January saw an increase lending for remortgages increase by 20% ad applications were up by 25% compared to December.
It seems as though homeowners are extremely happy with the rates on offer and don't want to miss out. They are not concerned if rates go lower as this will only be short term. They know that rates are going up in the long term and are happy to fix now
. Remortgage loans now make up for 28% of the mortgage market which is being welcomed by the Council of Mortgage Lenders because the gross mortgage lending saw a notable decline in January. It also shows that homeowner are looking to take equity out of their homes as house prices increase.
House Prices Still Going Up Across Britain
With house prices across the UK on the increase homeowners are feeling the benefits with an increase in their equity which is where much of the remortgaging is coming from. Of course not all of this money will be spent on housing as many homeowners splash out on new cars and home improvements. Al of this will be welcomed by the government as it tries to get re-elected in May.
Many homeowners are only looking to remortgage 50% of the value of their home which means that the mortgage market really opens up to them as banks look to lend to low risk customers. Yorkshire Building Society announced last week that it was offering a new two year fixed rate 1.18% beating the previous best rate by 0.01 percent that was being offered by HSBC.
It just goes to show how aggressive the mortgage market has become with some lenders wanting to offer the lowest rates available. all of this is great news for borrowers but the Bank of England will be keeping a watchful eye on Banks and will want to ensure that they are not acting recklessly.