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Remortgaging rises after base rate speculation

Remortgaging rises after base rate speculation

Category: Mortgages

Updated: 18/02/2011
First Published: 21/02/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Remortgage activity has reached its highest level for two years following speculation that the base rate might be about to rise.

Countrywide revealed that remortgages made up almost a third of all mortgage applications in January, a 5% increase on the previous month.

Further indicating that people increasingly fear a rise in rates, fixed rate products made up 84% of all mortgage applications, up 9% on the previous month and the highest level seen since August 2009.

The average deposit required of mortgage borrowers was 22%, a decrease of 4% compared with the previous month, but 3% higher than a year earlier.

"The growing popularity of fixed rate mortgage products is a telling sign that many are prepared to pay slightly more to give themselves peace of mind and stability with regards to their outgoings," said Grenville Turner, chief executive of Countrywide.

"Overall, the reality is that for the last two years only those that have had to move have done so.

"Discretionary movers, who typically make up somewhere around half of all transactions, are beginning to evaluate whether this is now the time to make a move."

However, the data suggests that the property market remains subdued overall.

The total number of mortgage applications received by the broker was 2% down on a year earlier, while the number of homeowners putting their properties on the market was down 5.8% compared with January 2010.

"The Government has set targets to increase business lending to small and medium sized enterprises, and it would be equally valuable to the economy if a deal could be struck with top lenders to help buyers gain affordable mortgage finance," added Mr Grenville.

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Our fixed rate mortgage best buy charts might also be of interest.

There you'll find some great fixed rate mortgage deals from well known lenders such as Santander and Woolwich.

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