Mortgage changers ‘betting’ on rate rises

More people are changing their mortgages because they expect the base rate to be raised before too long, an expert has stated.

Chief operating officer at mortgage brokerage Alexander Hall Andy Pratt noted the trend and explained: “The majority of that will be due to consumers taking a medium-term view that interest rates are going to go up and then looking to fix accordingly.”

The people doing this will be taking a “bet” on the base rate increasing as they will be anticipating it rising sooner rather than later, he noted.

Mr Pratt said the assumption being made is that those reverting to a standard variable rate (SVR) deal now could face a more expensive one as rates are raised and are therefore prepared to take a fixed rate that is currently higher than their current repayment.

The Bank of England has held the base rate in each of the last four meetings, having halved it to its current 0.5 per cent level in March.

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