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Rate war will spark remortgage wave, says John Charcol

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The proportion of borrowers remortgaging increased to four in ten last month, which could signal the start of a rush as fixed rates continue to fall for home owners with a large deposit, said an adviser.

Mortgage adviser John Charcol said these signs of life will increase in August and remain high over the next few months as the fixed rate price war at higher LTVs takes shape.

The proportion of borrowers taking fixed rates will increase in the coming months, said Charcol, despite the fact trackers are the natural choice when the possibility of a base rate cut is no longer being ignored against the backdrop of a low-interest rate environment.

Simon Collins, mortgage technical manager at John Charcol, said: “Even before the raft of new fixed rates, the market was becoming more competitive and remortgaging was starting to pick up again.

“With these new products many borrowers who are coming to the end of their current deal, can remortgage onto a five-year fixed rate that’s cheaper than their current lender’s Standard Variable Rate (SVR).”

Jonathan Clark, mortgage partner at Chadney Bulgin, said the remortgage market has come back a little, but said the fact UK lenders are working harder to retain customers goes against the grain.

“I had a customer with Abbey and we always phone the current lender to see if they can offer a deal and Abbey came back with the offer of a five-year fixed rate at 2.99%, matching the HSBC offer.

“This has been going on for a while with most lenders. Santander and Nationwide are particularly aggressive, but it’s always worth phoning the lender first.”

Clark admitted he wouldn’t charge the usual £199 plus VAT fee but said: “This is whole of market best advice, so we probably should.”


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