Grab The Best Remortgage Rates While You Still Can!
As human beings we tend to react to situations rather than pre-empt them. Due to favourable mortgage rates many mortgage borrowers are currently sitting on the Standard Variable Rate set by their bank. Now might be a good time to take some pre-emptive action, have a look at some of the best Remortgage rates around and take advantage of them while they’re still available.
We’ve Had It Good
Since the Bank of England dropped interest rates to 0.5% mortgage borrowers have been feeling the benefits of extremely low mortgage rates, especially those who were lucky enough to find themselves landed with a Lifetime tracker mortgage. Low rates have also benefited those people who are on Standard Variable Rates (SVR’s), these borrowers have also seen their mortgage payments drop from what they were previously paying on a fixed rate mortgage deal or at worst their payments have stayed the same. With such good outcomes for mortgage borrowers over the past few years, why would I suggest that now might be a good time to Remortgage?
Mortgage Rates Could Rise
Although the Bank of England base rate is at 0.5%, many mortgage borrowers are paying 4%-6% on their Variable Rate Mortgage.
Last year many lenders decided to up the interest rates they charged to mortgage borrowers by around 0.5%, even though the Bank of England hadn’t changed the base rate since 2009. Banks are still suffering the effects of massive losses and also have large loans they need to repay from bank bailouts. They’ve been helped out with cheap loans and free money from the Bank of England but with inflation still running high, that money might not always be available.
Banks Might Suffer More Losses
Over the past few weeks the economic news coming out of the UK has not been good. We’ve had negative economic growth, retailers closing their doors, more government cuts and it’s not just in the UK. Just a few weeks ago the US was faced with the prospect of going over the ‘Fiscal Cliff’ and Europe saw large declines in auto sales. A weak economy will often lead to job losses, job losses lead to repossessions and repossessions lead to more losses for the banks.
If the banks do get hit by even more losses that could lead to another rise in mortgage rates as the banks try and raise some extra cash.
Remortgaging could be a win-win?
Even if the economy did manage to avoid another financial shock in 2013, remortgaging could still turn out to be a win-win for borrowers.
As we mentioned earlier a lot of mortgage borrowers currently pay between 4% and 6% on their mortgage. The best fixed remortgage rates currently start from as low as 1.99% depending on your circumstances. When you look at those rates it seems that now might be just the time to get your hands on a low fixed rate mortgage, reducing your current payments while at the same time protecting your pocket from potential mortgage rate hikes in coming years.
Whether Remortgaging is right for you is dependent on your own personal circumstances so speak to a qualified advisor before making any decisions.