Clock ticking on ‘cheap’mortgages

Mortgage rate battles
Mortgage rate battles

The housing market is heating up once more as home owners look to snap up cheap re-mortgage deals before they disappear.

Some 44,488 mortgages with a total value of £7.7 billion were approved for house purchase in June; the highest monthly figure recorded since March 2014, according to the British Bankers’ Association (BBA).

Meanwhile, the body said it has also seen an increase in the number of people re-mortgaging, which could be due to borrowers wanting to snap up cheap fixed-rate mortgage deals ahead of a possible rise in interest rates.

The number of re-mortgage approvals has leapt by around one fifth (20%) compared with a year ago, with 23,985 re-mortgage approvals with a total value of £4bn in June.

The recovery took off strongly in early 2014, but there were signs of a slowdown in the second half of last year after stricter mortgage lending rules were introduced to make sure applicants really could afford to pay back their loans.

However, in recent months a mortgage price war has broken out between lenders, with many slashing the rates on their deals to the lowest they have ever offered.

Some experts believe ultra-low rates may not be around for much longer. Bank of England governor Mark Carney has already suggested that the base rate could start to increase from its 0.5 per cent low around the turn of this year.