As people attempt to pay back their remortgages, many are finding that it’s a lot more expensive than they thought. Those with a variable rate remortgage are being hit particularly hard and it’s been difficult for many to keep up on their payments. In fact, many experts are wondering what the future of the remortgage market may hold, as consumers continue to struggle. Every sector of the housing industry could be affected by the outcome.
“The repayment shock for those attempting to refinance two-year fixed mortgages is now huge. They are paying on average 163 basis points more than when they took the mortgage out,” said George Buckley, chief UK economist at Deutsche Bank.
He continued, “This is a very significant rise that will reduce demand both for new mortgage finance and remortgaging. There is bound to be a knock-on effect on house prices.”
“Lenders are no longer interested in the top end of the market,” says Gary Festa, of HFM Columbus, a wealth manager and mortgage broker. “Lenders are increasingly capping their loan offerings. Nationwide’s cut-off point is £500,000, as is the Chelsea Building Society’s for any scheme other than its standard variable rate.”
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