Why are mortgage rates rising and should I remortgage?
Mortgage rates are rising independently of Bank of England base rate movements.
One reason mortgage rates are rising is the increase in wholesale market funding costs over the last six months. Lenders advise that they have absorbed the extra costs for as long as they can, but now to maintain their profit margins the additional costs incurred have to be passed onto mortgage-holders.
A further reason is the escalation of the eurozone crisis. Concerns over what will happen to the UK economy should the eurozone collapse, is leading lenders to tighten mortgage criteria further and restrict more risky lending.
Lower deposit first time buyers are being hit the hardest as lenders consider such deals as higher risk
Mortgage rates are increasing across all products, however some lenders such as Barclays have fractionally cut some rates to encourage mortgage-holders to move away from rival lenders.
For those home-owners with medium to high levels of equity on rates of 4% or above, the advice is to remortgage and switch to a cheaper deal while competitive remortgage rates remain available.
Deal Direct 'whole of market' brokers are remortgage experts who can help you switch to a better deal.
For the most competitive mortgage rates on offer contact Deal Direct today.
