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Remortgaging more attractive as base rate held at 0.5%

Thursday, 4 February 2010 Writes Hazel Cottrell hazel.cottrell@consumerchoices.co.uk

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Homeowners should look seriously at remortgaging now to take advantage of low mortgage rates, says expert.

The Bank of England’s Monetary Policy Committee has voted to keep the base rate at 0.5% for the 11th consecutive month.

Anyone paying an SVR of at least 3.5% should consider a remortgage if they have at least 20% equity in their property.

And all signs point to the base rate remaining low for several years, according to Ray Boulger, mortgage expert at John Charcol (www.charcol.co.uk). As a result, many mortgage lenders are regaining confidence to lend.

Boulger said: “We are now around four months into the trend of mortgage rates gently falling, and have also seen a significant increase in the number of deals available.”

He added however that several lenders have increased their standard variable rates (SVRs) over the last month. This means that many more borrowers will find it worthwhile remortgaging.

He advised: “Anyone paying an SVR of at least 3.5%, or about to revert to one, should consider a remortgage if they have at least 20% equity in their property.”

The Bank of England also said today that it is not extending its quantitative easing programme this month. Quantitative easing has allowed banks to swap assets for money; which they can then lend in an effort to stimulate the economy.