Leave plenty of time to remortgage and if you spot a good deal, grab it.
That is the advice being issued to remortgagers by finance experts following the decision yesterday by the Bank of England to keep interest rates at 5.25 per cent.
While the decision came as no surprise, it has brought into sharp focus the fact mortgage-lenders are failing to pass on lower rates to customers and are instead hiking prices to boost their own margins.
Melanie Bien, director at Savills Private Finance, said: "Abbey, one of the biggest lenders, announced it is raising its fixed and tracker rates from next week – even though the base rate is on hold.
"It proves the connection between base rates and mortgages rates has been all but severed as lenders look to improve margins rather than market share.
"Even if base rates come down further, as expected, this won't necessarily filter through to new mortgage deals."
However, Ms Bien said all was not lost. She urged remortgagers to seek advice from an independent mortgage broker with access to all the deals on the market.
"It is also important to act quickly," she said. "If a borrower sees a rate they like the look of, they should move swiftly to secure it as lenders are pulling the best rates with little notice"
"Borrowers should also leave plenty of time to remortgage as lenders offering the most competitive rates are being inundated with business so service levels may suffer."
Ray Boulger, senior technical manager at mortgage broker John Charcol, echoed the advice.
He said: "As lenders change rates increasingly quickly, with most new rates higher than the ones they replace, borrowers who want to remortgage should start to investigate their options as much as six or seven months before the current deal ends. This is because some mortgage offers are valid for six months, although others only last three months."
Source:
http://www.myfinances.co.uk/news/mortgages/remortgage-advice/
how-remortgage-in-turbulent-market-$1210257.htm
