Competitive mortgage deals being withdrawn quickly, consumers urged to act fast

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by Kay Murchie

With the ongoing credit squeeze, lenders are tightening their lending criteria so those re-mortgaging are being urged to act fast. According to some brokers, competitive deals are being pulled at short notice.

A spokesperson for London and Country Mortgages said lenders are being much cautious careful about who they are lending to and how much business they take.

Competitive deals are still available, but fears of having ‘all their eggs in one basket’ meant these deals were being pulled at short notice when they became popular, added the spokesperson.

Approximately 1.4 million face an average monthly rise of £200 when their fixed-rate deals are due to expire this year.

According to a survey by Mortgage Monitor, one in 20 of those on fixed-rates say they have no idea how they will meet repayments when their current deal expires.

Property analysts believe the higher repayments will cause a rise in repossessions, which could send the property market into a downward spiral not experienced since the 1990s.

Ray Boulger of John Charcol said anyone coming to the end of a deal should plan ahead by finding out what new deal their current lender was offering. They should also use an independent advisor to get an insight of how the market has changed.

The Council of Mortgage Lenders has taken the extraordinary step of suggesting that it may be prudent that some sell their home rather than risk repossession. In many cases they could stay in the same home, paying rent.