-Only 7% of homeowners are considering re-mortgaging
-Borrowers may miss out on historically low interest rates
The latest Legal & General Mortgage Mood survey reveals that two thirds of consumers (65%) are not financially preparing for an interest rate rise in the next two years. At the same time, only 7 % of those polled are considering re-mortgaging their home in the next 12 months. These findings form part of
With speculation continuing as to when the base rate will rise, and many commentators suggesting it will be in 2015, lenders have already started to price in the change prior. These findings therefore suggest that borrowers may be missing an opportunity to secure a low interest rate.
Further findings reveal that, of those who said they are considering to re-mortgaging their home, the most common reason is to reduce monthly repayments, with nearly a quarter choosing this explanation (18%). Only 9% cited financing home improvements and just 7% of homeowners said they were considering it to consolidate existing debts.
When asked whether they were considering re-mortgaging their home in the next 12 months, those in
"It appears that borrowers have not yet woken up to the possibility of a rate rise. With rates likely to go up in the medium term, lenders are already starting to price in a change in base rate in advance. Therefore, the record low interest rates we have seen in recent times are not going to be around for long. By not preparing or re-mortgaging, homeowners might miss a good opportunity to secure a record low interest rate."
"It is also interesting to note that only a small proportion of people surveyed would re-mortgage in order to consolidate debt or to finance home improvements. Following the impact of the financial crisis, it seems fewer consumers are choosing to borrow against their housing equity to fund their spending. In line with this view, the level of housing equity withdrawal has seen a downward trend for the last few years in contrast to the boom years."
"Although it is good to see borrowers exerting more caution, the reality is that there is only one way interest rates can go -- and that is up. Now is the time for borrowers to consider their options. Speaking to a mortgage adviser is the best way to understand all the options available and to secure one of the good deals that are still around at the moment."
Notes to editors
The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions.
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