There was a surge in re-mortgage activity in August, as expat borrowers look to lock into cheap deals ahead of an expected interest rate rise.
Since the financial crisis in 2008 mortgage rates have steadily fallen. The Bank of England cut interest rates in August 2016 from 0.50% to 0.25% – the lowest on record and the first interest rate cut since 2009 when the financial crisis was at its peak. This led to a number of lenders slashing their rates and competition in the mortgage market heating up.
However, with the Bank of England hinting that it could raise interest rates for the first time in a decade in order to curb inflation, economists are predicting a hike could come as soon as November this year. Record low mortgage rates continue to sustain market activity, but given even the most dovish members of the Bank of England’s Monetary Policy Committee are now adding to the calls for an interest rate rise, this picture could very quickly change.
A “wait and see” approach is best avoided for existing expat UK homeowners considering re-mortgaging.
The number of expat mortgages approved also went up in August for the second month in a row, suggesting the market is picking up steam following the Brexit vote.
Expats who avoid reviewing their current mortgage deal could well pay for this error in the long term as interest rates look to be going upwards. Not everybody will benefit from changing their mortgage but it certainly makes sense to check how your existing deal stands up to the future.
If you would like to review your current mortgage please make contact and one of our advisers will be happy to help.