here is concern over rising house prices and recent increases to mortgage rates has not been effective in deterring borrowers from paying a high price for their dream home because the highly competitive fixed, discounted and capped rates available have countered any increases keeping mortgages at very affordable levels.  

Contrary to the popular opinion, we do not believe house price inflation is a major cause for concern, nor that it should dictate further base rate rises.  In the housing market it is remortgage business that causes the most concern about general inflation within the economy as occurred in the late 1980s.   This is because home owners realise the value of their homes and tend to release equity in their properties to fund the purchase of a new car or new furniture rather than waiting until they have saved the money.   In effect, they become asset rich.  However, remortgage activity has been steadily falling as a proportion of overall mortgage transactions which suggests this is not the case.  

The question remains what should borrowers do if they are looking at a mortgage or remortgage currently.  If you are paying a standard variable rate and do not have any redemption penalties it does make sense to remortgage.  With the competition in the mortgage market currently there are large numbers of competitive products available and picking the right one is a difficult choice which is why an increasing number of people seek independent advice.  

If you are thinking about your mortgage call John Charcol now on

01483 409800.