Shrinking Opportunities for Remortgaging in 2010
Homeowners that need to remortgage have been urged to do it sooner rather than later, as it is likely to become much harder in the near future.
This is because there could be a chance of a future double dip occurring in house prices, combined with the likelihood of continued inflation, which may increase interest rates. Additionally, taking a home loan is cheaper now than it has been in 35 years.
Data released by the Consumer Price Index (CPI) has shown that while property prices have dropped 3.2 per cent in June, compared to 3.4 per cent in May, high core inflation has meant that the Bank of England has been put under pressure to raise the interest rates. In addition, the CPI also revealed that the high number of people who are entering the property market will mean that prices will continue to fall.
Those who currently have approximately 15 per cent equity in their homes (the proportion needed for a good mortgage deal) have been urged by market observers to remortgage as soon as possible in case the second fall in property prices lowers their equity level. PricewaterhouseCoopers (PwC) has also estimated that the peak house prices seen in 2007 will not be regained until around 2015, which means it's even more important to remortgage now.
Citywire reported that during mid-July there were more than 2.3 million homeowners on the standard variable rate (SVR) of their lender, equating to 28 per cent of all borrowers, who simply switched when their fixed deal came to an end.
Mortgages news posted by Don on 16 July 2010
