Re-mortgaging expected to increase

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by Kay Murchie

Latest figures published by the Council of Mortgage Lenders (CML) have indicated that re-mortgaging could have a significant effect on the UK market this year.

Fixed-rate deals are due to mature over the course of the summer meaning borrowers will be affected by rising interest rates.

This is likely to have a huge impact on more highly leveraged borrowers who refinance, or transfer to a variable rate mortgage.

The Bank of England commented that the average fixed-rate for outstanding mortgage balances in May was 5.13% whereas the average fixed-rate on new loans was 5.44%.

Analysts anticipate that the economy may experience a slight slowdown due to a larger share of household’s income being spent on repayments of mortgages.