Low Interest Rates on Remortgages and Mortgages Are Not Going to Stay

Low Interest Rates on Remortgages and Mortgages Are Not Going to Stay

The current boom in the housing market is certainly being sustained because of low interest rates. Home buyers, home movers, and landlords are motivated by the low cost of borrowing despite reports of higher asking prices from sellers. In securing a low interest rate a home buyer could save a substantial amount of money making it worthwhile to take action while rates are low.

The current standard base rate set by the Bank of England is the lowest in its over 300 year history at 0.1%. The rate slashing came about as a response to the global pandemic. By lowering the cost of borrowing it was hoped that the economy and consumers would be able to ride the financial tide expected with lockdowns and shuttering of businesses.

Lenders have been offering their own versions of helpful low cost borrowing that has fluctuated over the past months. When risk in lending was high, the lowest interest rate offers were for those with the very best credit history and high value properties set against lower value loans. In short, most first time home buyers were not going to have access to the very best low interest rate deals. 

However, the offers were attractive and affordable even if they weren’t the very lowest interest rates offered. In comparison to offers two or more years ago, there were very good deals to be had and home buyers were in search of their dream home to make the pandemic lifestyle more efficient and comfortable.

Homeowners have had access to low interest rate remortgages as well. Some have taken advantage of the higher value housing market and turned their increased value or equity in their property into cash. The equity cash release remortgage has helped homeowners to fund their own home improvements to their existing property.

However, low interest rates are not going to stay around as the new norm. Some experts have forecasted the Bank of England to increase the standard base rate by the middle or end of next year. This would be important information to those borrowing as to whether it is smart to take on a longer term low interest rate or a shorter one. Of course, locking in a many year fixed rate low interest is a smart savings move when rising rates are on the horizon.

It should be noted that lenders could change their offerings at any time. The lowest and most accessible deal offered today could be removed tomorrow should the risk of lending be seen as higher due to outside factors such as the state of the global economy, any pandemic changes other than better control of the spread of Covid-19, or if demand becomes too high for a lender to meet with lender restrictions. 

There are many reasons why a lender would pull their very best deals and leave a borrower having to pay more to borrow with a higher interest rate. Experts are certainly encouraging those that could benefit and save with a lower interest rate to shop around and discover the very best offer while low interest rates are the norm. It won’t be that way forever, and it could all change very quickly as to what offers are available. 

Shopping online is a quick and easy way to start shopping for a remortgage or mortgage. It can be done conveniently and in a matter of minutes a home buyer or homeowner can have quotes in hand to begin narrowing down their search for their best deal.

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