Cheapest re-mortgage deals are still available

Home-owners are likely to continue to benefit from the cheapest re-mortgage deals due to the Bank of England’s Monetary Policy Committee's decision to leave the standard base interest rate at 0.5%. The Monetary Policy Committee are not expected to increase the standard base interest throughout 2012 meaning that remortgaging should remain cheap.

In particular, first-time buyers and new borrowers will feel the benefit of mortgages being at their most affordable level for 14 years. According to research from the Halifax, monthly payments for home-owners who looking to re-mortgage, stood at an average of 27% of disposable income in the fourth quarter of 2011, lenders cheapest re-mortgage deals will help improve this figure.

Martin Ellis who is the housing economist at the Halifax has said that the fall in house prices and cuts in mortgage rates have led to a significant improvement in housing affordability. He added that the prospect of an exceptionally low Bank base rate will likely maintain housing affordability in 2012.

There are however fears that in 2012 borrowers will struggle to meet the tighter criteria imposed by lenders. Estate agents fear that the current low levels of completed sales could stall further when the stamp-duty holiday for first-time buyers ends in March. Failing to secure a mortgage is still the top reason given when a sale falls through.

Forecasters believe the cheapest re-mortgage and mortgage deals are here to stay for a further four years. According to the Centre for Economics and Business Research, the base rate will remain at the historic low of 0.5 per cent until 2016.