Photo: Happy Haggis
Remortgagers in the UK are rushing to beat the interest rate hike expected to take place next year.
Almost 3 in 1 now believe rates are about to go up, according to new research from LMS. A customer survey reveals that the number of remortgagors who anticipate rate rises has increased significantly in the last six months, from 16 per cent in February to 28 per cent in August.
The assumption is driving remortgage activity among borrowers keen to take advantage of record-low rates before a hike, with lending up 20 per cent year-on-year in August to £4.2bn. Indeed, almost two in three told LMS that they remortgaged specifically to take advantage of lower mortgage rates: nearly two in five reduced their monthly payments by up to £500, with 4 per cent reducing monthly payments by more than £500.
Andy Knee, Chief Executive of LMS, comments: “Competitive offers and the threat of a base rate rise continues to drive remortgaging activity as winter approaches, even though an increase before the end of the year now appears unlikely. That said, it is better for borrowers to take the necessary measures in good time rather than be caught off guard.”