Mortgage News

Mortgage borrowers 'biding their time' - 08/01/2008

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The Council of Mortgage Lenders (CML) suggests that mortgage borrowers may be waiting for further interest rate cuts before switching to a better deal.

A new report from the body shows that remortgaging volumes declined in November 2007 to 73,000, representing a drop of 21 per cent since October's figure.

According to the CML, there could be a number of reasons for this decline, among them an expectation among consumers that rates are going to be cut further by the Bank of England.

Homeowners could be waiting to assess whether a remortgage is the best option based on the Bank's next series of interest rate decisions, the association comments.

Another possible explanation for the decline is said to be that borrowers coming to the end of fixed-rate mortgage deals are being offered attractive incentives to remain with their existing provider.

This latest report from the CML indicates a further fall in the proportion of borrowers taking out fixed-rate mortgages, from 68 per cent in October to 65 per cent in November, representing the fifth consecutive month this trend has been reported.

"Most borrowers are on fixed rates and so will not see any immediate benefit from another change in the base rate," said Michael Coogan, director general of the CML.

The Bank of England last week reported a rise in the number of secured loan approvals in November 2007 compared to the previous month.

© Adfero

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