Remortgage activity doubles
In July there was a 127% rise in remortgage applications year-on-year and an 87% rise in August, as speculation about when Bank of England will intervene persuaded more borrowers to take action.
Few industry commentators expect the Bank to raise the bank rate this year; however with the Federal Reserve in America threatening to raise its own bank rate in 2015 it is thought the UK will follow next year.
David Hollingworth, associate director, communications, at London & Country Mortgages, said: “With Bank of England Base Rate at a record low for so long it would be no surprise if some borrowers have become complacent about mortgage rates, especially when it seemed that they just kept on falling.
“However, some mortgage rates have ticked up slightly and, as the discussion around a base rate rise intensifies, more borrowers are bound to review their situation.
“The mortgage market remains highly competitive and many will find that they can cut their mortgage rate by switching to a fixed rate, which could slash their monthly payment as well as offering protection against any potential rise in interest rates.”
David Robinson, national intermediary sales manager at Accord, part of the Yorkshire Building Society Group, said consumers are right to lock onto cheap deals.
He added: “Despite pundits speculating when a rate rise may occur, Mark Carney stated the exact timing cannot be predicted in advance.
“That’s why brokers need to help their clients to be financially savvy and look at whether they would be better off locking into a fixed rate now whilst market conditions are still very favourable to borrowers.”