Recently released data indicates many house owners sought out a remortgage prior to the official announcement of the hike in the base interest rate. The Intermediary Mortgage Lenders Association’s Mortgage Market Tracker made the figures public after lenders reported demand for remortgage in the months leading up to the hike. Almost 80% of brokers noted a higher demand for 5-year fixed loans during the first six months of the year. More than 65% of all lenders experienced the same.

The housing market was hit with an unknown factor this month. For the first time in a decade the Bank of England Monetary Policy Committee (MPC) increased the standard base interest rate. This means that borrowing is more expensive, including borrowing for home buyers seeking a mortgage and homeowners choosing a remortgage. The fact that this is the first increase in so long there are many experts closely watching for how it will impact the housing market. 

The last three months ending with the conclusion of October have seen more house price growth. Latest figures from the Halifax indicate house price growth of 2.3% over the previous three months. This is the fastest growth for house prices based on a ninety day period since January of this year. Not only does this illustrate the strength which still resides in the housing market, but also optimism of the market in general moving forward.

Obtaining a remortgage on a property is often desired by those in search of a lower monthly payment. It is often sought out by those looking to access home equity which can then be used for home renovations, paying off old debt, and so on. There are many homeowners now facing a dilemma since interest rates are now officially increasing. That dilemma is understanding the cost of remortgaging compared with the actual savings which are possible.

The Bank of England kept its promise last week and increased the base interest rate. Reaction was not surprise for most, but it did leave some feeling like they had missed a grand opportunity. That group who feels they missed out is homeowners who have not obtained a remortgage yet, especially with interest rates still at such a low level.

Recent housing data suggests many attempting to get a foot on the first rung of the property ladder will likely be renting instead. For the next several years it appears many potential buyers of property will be paying a monthly rental fee instead of a mortgage. This is forecasted for several reasons, but the main one being the difference between wages and house prices, according to NatWest.