There was a surge in re-mortgage activity in April, May and June of this year, 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 in the near future as Brexit fears take a grip, economists are predicting a hike could come as soon as November this year.
Record low mortgage rates continue to sustain market activity, many 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 May and June, suggesting the market is picking up steam before the Brexit outcome is decided..
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 independent advisers will be happy to help.