Mortgage And Remortgage Rates Rise. Will Secured Loans Follow?

Remortgage and mortgage rates have had low interest rates for some time now.

The low rates can in part be attributed to the fact that The Bank Of England Base Lending Rate was reduced to also an all time historic rate of half of one percent, which had a knock on affect on mortgage and remortgage rates.

Tracker products do exactly as they say, and that is they follow or track the base lending rate, and when this rate is low, so are mortgage products.

There are also variable mortgages, that as their name also suggests, can vary depending, not only on the base rate, but to some extent on the whim of the lender.

Mortgage providers can alter the rate to suit themselves to a certain extent.

Therefore both tracker and variable repayments can alter, and rise at any time, but over the past few years, interest rates remained low and very stable.

Mortgages are the finance required to buy a home, and buying a home would, in normal circumstances and times, be an attractive proposition, when rates are low.

However, many would be property buyers were put off by the fall in house prices during the recession, and preferred to stay put as it were.

Mortgages tumbled as a result, as did remortgages for the same reason.

At the end of a mortgage tie in period, during which there would be an early repayment penalty of up to 5% of the outstanding balance, many homeowners used to arrange a remortgage, which is a mortgage with a different lender.

Sometimes a remortgage is only for the same amount and a lower interest rate is obtained. At other times a homeowner borrows more, and uses the funds for a variety of purposes.

Debt consolidation can save a fortune every month when a remortgage is used as debt consolidation loans that pay off high interest debts in credit cards, etc.one low repayment is all that remains.

Secured loans have the same uses as remortgages, and are loans that are secured on the equity of property.

There was a decline in secured loan approvals for the same reasons as remortgage had declined. In addition criteria tightened.

Many people, who were eligible for remortgages and secured loans in the last two or three years, when rates were low, may now be sorry that they did not apply at that point as rates look like thay are going up, with the Abbey already announcing an increase in interest rates.

Secured loans may go down the same road.

by: Liz Moir

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