Nelson Mortgages

According to recent figures the recent rises in interest rates has seen the level of interest and activity with remortgage rise steeply, as consumers rush to try and find a more competitive deal on their mortgage before interest rates rise yet again. Interest rates have already been hiked up by the Bank of England five times since this time last year, with each rise being 0.25%, adding an additional 1.25% to the 4.5% interest rate from last August – the base rate now stands at 5.75%.

Homeowners have seen their repayments rocket in this time with repayments on variable rate mortgages rising in line with the interest rates. To make matters worse many analysts are predicting that, although the Bank of England decided to keep interest rates on hold after the August Monetary Policy Committee meeting, it is likely that the interest rates will rise at least once more before the end of this year.

Figures indicate that there has been a rise of 13% in the amount borrowed by way of mortgage loans this July compared to last July, and it is thought that a substantial proportion of the £1 billion per day in mortgage lending over the month of July can be put down to remortgages, where consumers are trying to get a better deal on their mortgage before further interest rate rises bite.

Some experts are now stating that another rise may not be necessary as a result of inflation coming within the government target for the first time since March 2006. Inflation now stands at 1.9%, with a government target of 2%. In March of this year inflation stood at 3.1%, which was well above the target, but has since come down.

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