How to remortgage in turbulent market

Saturday, 15 Mar 2008

Leave plenty of time to remortgage and if you spot a good deal, grab it.

That is the advice being issued to remortgagers by finance experts following the decision yesterday by the Bank of England to keep interest rates at 5.25 per cent.While the decision came as no surprise, it has brought into sharp focus the fact mortgage-lenders are failing to pass on lower rates to customers and are instead hiking prices to boost their own margins.

Melanie Bien, director at Savills Private Finance, said: "Abbey, one of the biggest lenders, announced it is raising its fixed and tracker rates from next week – even though the base rate is on hold.

"It proves the connection between base rates and mortgages rates has been all but severed as lenders look to improve margins rather than market share."Even if base rates come down further, as expected, this won't necessarily filter through to new mortgage deals."

However, Ms Bien said all was not lost. She urged remortgagers to seek advice from an independent mortgage broker with access to all the deals on the market.

"It is also important to act quickly," she said. "If a borrower sees a rate they like the look of, they should move swiftly to secure it as lenders are pulling the best rates with little notice"

Source: http://www.myfinances.co.uk