Borrowers Could Now Be Better Off Looking To Switch Their Homeowner Loan
With the Bank of England base rate of interest at the lowest level it has ever been and banks and building societies failing to offer most people any sort of competitive home owner loan or mortgage deal over the course of the past two years, the majority of home owners have chosen to remain on their existing lender’s standard variable rate once their initial loan deal has expired.
In a large number of cases, the reversionary rate on their existing loan has been cheaper than anything else on offer from the market. But in other cases, borrowers have been unable to switch their loan and remortgage due to having a high loan to value on their existing loan, or perhaps having a less than perfect credit rating, or requiring a self certification loan or mortgage.
For many of these people, it has not been possible to obtain a new loan, due to much tighter lending criteria on loans from banks and building societies and this situation is likely to continue for some time.
But due to a recent wave of more competitively priced home owner loan deals from lenders and an increase in the maximum loan to value they are prepared to offer, many borrowers could now actually be better off looking for a remortgage.
The news comes from a new survey conducted by Moneysupermarket.com, who now believe that a large proportion of people with a home owner loan could save money with a remortgage, particularly since a large number of lenders are starting to increase their standard variable rates on existing loans.
Hannah Mercedes Skenfield of moneysupermarket.com said “Over the last month or so, we’ve seen the market shift. Standard Variable Rates have increased, rates for new borrowers have been falling and we’ve seen an increase in the availability of mortgages at higher loan to values. The remortgage market is open for business once again.”
