Remortgage rise due to fixed-rate gamblers
Mon, 03 Aug 2009
There has been a significant rise in the uptake of fixed rate deals and some experts are describing this as a gamble on the homeowners part. The logic people are “gambling” that rates will rise in the near term and as such they will save from choosing a fixed rate.
This would be the worlds first gamble where the outcome of bet will be the same regardless of the outcome of the factors gambled upon, one can only assume they have never visited a casino. The term ‘seeking security’ might be better suited.
The Bank of England has recently released figures showing a 9% increase in remortgaging from 31,874 in May to 35,011 in June which Mr Pratt of Alexander Hall has translated as home owners remortgaging to fixed rate deals, bracing themselves for a rise in rates.
It seems no one can make up their mind between fixed rate and tracker deals. Whilst some experts are shouting with all their might, “get a tracker, the rates are staying low” others with equal vigour are declaring now to be “the best time in a generation” to take up a Fixed Rate.
The simple answer is the same as it has always been, it is entirely dependant on your financial situation; no one should ever go for a particular product on the basis of some expert proclaiming he has seen the future of interest rates.
Quite separate from all this is what is actually expected to happen with rates, which in the foreseeable future (8 months) we are not going to be seeing a rise, inflation is falling and staying low (which normally stimulate rate lowering).
Our recommendation, speak to a broker and get advice that is tailored to your needs; don’t listen to men calling themselves the new mortgage messiah.