Bank Rate held at 0.5%, but remortgaging returns
Posted on 4 February 2010 by
Let's make the first bit quick. Bank rate was held at 0.5% by the Bank of England today, no surprise there then...however, of more interest is...
The return of the remortgage?
The slowly improving mortgage market will certainly make buying a property a little easier. However, with several lenders having announced increases in their standard variable rate (SVR) over the last month, it will also mean that more borrowers will find it worthwhile remortgaging. Remortgage activity fell steadily throughout the whole of last year but the combination of actual increases in SVRs, plus fears of increases, coupled with the cheaper rates now available for new mortgages, means that anyone paying an SVR of at least 3.5%, or about to revert to one, should consider a remortgage if they have at least 20% equity in their property.
Assuming property prices continue to rise, even only gently, the number of borrowers with at least 20% equity will steadily increase, making a remortgage progressively worthwhile for more people. For this reason I expect the dramatic fall in the volume of remortgaging to be close to end and to see a slow increase in remortgage activity this year.
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