UK in remortgaging limbo as rates decision nears
As the nation looks forward to a well-deserved break over Easter, which could involve a weekend away or painting the spare bedroom, so the Bank of England is preparing to make another interest rate decision on April 5th, something that is likely to be ignored by most Brits who have more pressing things to worry about.
And if the hearts of men and women are not exactly aflame with the desire to know the fate of interest rates this month, some will be slightly concerned whether or not their mortgage payments are about to go skyward again.
Indeed, the last few weeks have seen a rush (of sorts) to remortgage to fixed-rate deals. In fact, the Bank itself has reported that 116,000 remortgages were taken out in February, 9,000 higher than in January, a fairly reasonable indicator that the surprise 0.25 per cent interest rate hike in that month had an unpleasant impact on buyers.
Despite all the talk of remortgaging, which is still a favourite topic among finance journalists and lending firms, the usual media anticipation has been slightly muted this month, almost as if people are slightly sick of trying to second-guess rates. Just in case, you're interested, the general consensus is that rates will probably go up one more time before or during summer, but nobody knows for sure and what happens after that is anybody's business.
At the same time, I think the general public is getting used to having money taken off them through 'legitimate' channels – tax, utility bills, mortgages, loans – despite the fact that wage hikes are failing to catch fire. So it is in this climate of creeping costs that people fall into two camps – those who do nothing and the let tide of rising costs wash over them, while others take a more aggressive approach by taking their business elsewhere. And if this involves people leaving behind their current bank and finding a cheaper deal at another lender, so be it.
As more and more people start worrying whether an economic malaise is starting to set in, experts are now split as to what kind of remortgaging solution is best for the Britain's homeowners. While some pundits still believe that fixed-rate deals are the answer, others are less sure and are wondering if variable-rate mortgage are the future for the time being – especially if rates have reached their peak. This means that homeowners may not want to be locked into fixed rates and may decide to take out capped tracker or capped discount mortgages.
But if experts cannot agree, then how are homeowners supposed to make their minds up? And here lies the problem: homeowners know they ought to remortgage (everyone else seems to be doing it) but do not have much of a clue when it comes to making a concrete decision. And while price comparison sites are very good at coming up with stats and trends and stray bits of advice, somehow there is a feeling at the moment that everything is in limbo.
Still, even if homeowners make the decision to watch the pennies and not spend so much over Easter, then at least some form of saving action is taken. However, it might be even wiser to wait for the Bank of England to make its decision this Thursday and see what the future holds.
And if the hearts of men and women are not exactly aflame with the desire to know the fate of interest rates this month, some will be slightly concerned whether or not their mortgage payments are about to go skyward again.
Indeed, the last few weeks have seen a rush (of sorts) to remortgage to fixed-rate deals. In fact, the Bank itself has reported that 116,000 remortgages were taken out in February, 9,000 higher than in January, a fairly reasonable indicator that the surprise 0.25 per cent interest rate hike in that month had an unpleasant impact on buyers.
Despite all the talk of remortgaging, which is still a favourite topic among finance journalists and lending firms, the usual media anticipation has been slightly muted this month, almost as if people are slightly sick of trying to second-guess rates. Just in case, you're interested, the general consensus is that rates will probably go up one more time before or during summer, but nobody knows for sure and what happens after that is anybody's business.
At the same time, I think the general public is getting used to having money taken off them through 'legitimate' channels – tax, utility bills, mortgages, loans – despite the fact that wage hikes are failing to catch fire. So it is in this climate of creeping costs that people fall into two camps – those who do nothing and the let tide of rising costs wash over them, while others take a more aggressive approach by taking their business elsewhere. And if this involves people leaving behind their current bank and finding a cheaper deal at another lender, so be it.
As more and more people start worrying whether an economic malaise is starting to set in, experts are now split as to what kind of remortgaging solution is best for the Britain's homeowners. While some pundits still believe that fixed-rate deals are the answer, others are less sure and are wondering if variable-rate mortgage are the future for the time being – especially if rates have reached their peak. This means that homeowners may not want to be locked into fixed rates and may decide to take out capped tracker or capped discount mortgages.
But if experts cannot agree, then how are homeowners supposed to make their minds up? And here lies the problem: homeowners know they ought to remortgage (everyone else seems to be doing it) but do not have much of a clue when it comes to making a concrete decision. And while price comparison sites are very good at coming up with stats and trends and stray bits of advice, somehow there is a feeling at the moment that everything is in limbo.
Still, even if homeowners make the decision to watch the pennies and not spend so much over Easter, then at least some form of saving action is taken. However, it might be even wiser to wait for the Bank of England to make its decision this Thursday and see what the future holds.
Author: Richard Mather
