The UK Witnesses an Increase in Remortgage Approvals

The base rate at the level of 0.5% is the lowest rate in the history of the United Kingdom. This fact determined the desire of customers to change their mortgage contracts in the circumstances of incredibly low repayments. Remortgaging approvals in the UK have risen to almost 31,750 in March.

The rise of remortgaging approvals can be beneficial to people in both cases when an individual saves on his or her home loan repayments and when an individual makes certain fanatical investments on the base of historically low mortgage rates.

Taking into consideration the concession of the Bank of England, people start to sell their poorly performing endowment policies instead of surrendering.

The UK’s biggest buyer of endowment policies is AAP. AAP is a company that buys with-profits endowments. Selling policies to AAP becomes more profitable for customers than surrendering, because the company offers better prices.

Nevertheless, we should not be under the delusion of ongoing decrease of the mortgage rates. Experts, especially mortgage brokers, assure that during next months the possibility of interest rates increase is strong. Before it is too late, specialists strongly recommend borrowers to fix rates.

The trouble is that when house prices reach the bottom, theoretically they are expected to rise. It means that the increase of the property prices will be coupled by a sharp rise of interest rates; as a result, many people will probably find themselves in the interest rate trap with no way out as remortgage will be unavailable.

The Council of Mortgage Lenders released the figures that prove the 16 per cent up growth in total gross lending in March, in other words total gross lending is estimated at £9.9 billion.