EThe mortgage market in Britain is experiencing a notable change as the reasons why expats re-mortgage evolves. Expat UK home owners are moving away from short term deals and variable rates onto two and five-year fixes at low rates in moves to guarantee certainty and financial security, according to the latest reports.
Only 17% of expat owners re-mortgaged to lower their monthly repayments in December last year compared to 21% in September. 15% re-mortgaged to increase the size of their overall loan in December, a fall from 19% in September.
The analysis suggests that instead of re-mortgaging to lower monthly repayments or borrow extra money, expats appear to be nervous about interest rates increasing and re-mortgaged onto long term deals for certainty and financial security. Just 2% of re-mortgagors predict interest rates to fall in the next year, with the remaining 98% expecting rates to either stay the same or rise. The Brexit situation is without doubt having a say as to how people see the next few years panning out.
Over a third, some 37% fixed onto a longer-term deal in December and January, the greatest since numbers were first tracked, and a significant increase from 7% who previously had a fixed five-year product.
This is a meaningful change in expat behaviour when re-mortgaging. Typically, over the last year, people were re-mortgaging to save on their monthly repayments or borrow additional funds. Instead, with rates low and expectations of a rate rise high, expats are fixing for longer for added financial security.
Expats it would seem are taking shelter from future rate rises and preparing for potentially turbulent times to come. The way people borrow is changing, there is a significant decline in interest-only and variable rate deals, fixing for longer appears to be the top priority.
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