Bank Rate held at 0.5%, but remortgaging returns

Let's make the first bit quick. Bank rate was held at 0.5% by the Bank of England today, no surprise there then...however, of more interest is... The return of the remortgage?The slowly improving mortgage market will certainly make buying a property a little easier. However, with several lenders having announced increases in their standard variable rate (SVR) over the last month, it will also mean that more borrowers will find it worthwhile remortgaging. Remortgage activity fell steadily throughout the whole of last year but the combination of actual increases in SVRs, plus fears of increases, coupled with the cheaper rates now available for new mortgages, means that 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. Assuming property prices continue to rise, even only gently, the number of borrowers with at least 20% equity will steadily increase, making a remortgage progressively worthwhile for more people. For this reason I expect the dramatic fall in the volume of remortgaging to be close to end and to see a slow increase in remortgage activity this year.

Bank Rate decision, a forgone conclusion…

Just 40 minutes to go before February's announcement from the Bank of England on Bank Rate. You'd have to be a brave person to predict anything other than a hold but whether QE is stopped or not is not quite as easy to call. Whatever the decision, it looks like the remortgage market will start to pick up again soon. More to follow...

Bank of China reassures its tracker passes on rate cuts

Bank of China (UK) has an advert on p.9 of Metro today promoting its Bank Rate + 2.3% lifetime tracker, available up to 75% LTV. If one assesses competitiveness purely on rate and ignores the criteria this rate is market leading for LTVs between 70.01% and 75%.

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Demand for mortgage tracker deals plummet

To promote lower rates from today on a third of its 2 year fixes (those with a maximum LTV of 80%) Santander has put out a press release headlined:

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Skipton…have they really done that?

The big news today is that the Skipton Building Society has increased its Standard Variable Rate from 3.5% to a staggering 4.95%, at the same time breaking contracts with thousands of their borrowers.

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