Remortgagors expect interest rate rise

Ryan Bembridge

November 16, 2016

fingers-crossed

A quarter (23%) of remortgagors expect interest rates to rise in a year’s time, LMS research has found.

In October just 6% expected them to fall in the next year, down from 9% in September.

This expectation is reflected in the growing popularity of 5-year fixed rate mortgages, which accounted for 19% of mortgages that were switched in October.

Andy Knee chief executive of LMS, said: “The lead up to Christmas, low-rates and greater anticipation of a rate rise within the next year is the driving force behind the decision of many to remortgage now.

“Economic and political uncertainty spreading as a fall-out from the UK’s vote to leave the EU has affected people’s priorities. More people are looking for long-term security.

“They want to ensure they know exactly what they will owe and when, while the terms of Brexit are battled out.”

In October 89% of remortgagors were able to lower their mortgage rate.

Three in five (60%) were only driven to remortgage because they had come to the end of their current deal, while almost a quarter (23%) did so to lower their monthly repayment.

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