Consumers 'making a bet by remortgaging'

The decision of many property owners in the UK and Northern Ireland to consider remortgaging has been described by an expert as "a bit of a bet".

Figures from the British Bankers Association suggested remortgages were up in June this year compared to the previous month and Andy Pratt, chief operating officer at broker Alexander Hall, said this was inspired by the medium-term view that interest rates are rising.

He explained that the issue was leading many consumers to fix, but added that it is somewhat of a gamble as it is unknown when rates will return to high levels.

"More and more are looking at it and thinking: 'Well, I know it's low at the moment, but I'd rather take that deal now which guarantees for the three years rather than bearing the brunt of the increase," he outlined.

"It is a bit of a trade-off."

The Council of Mortgage Lenders recently claimed that gross lending in June totalled an estimated £12.3 billion, which was a 17 per cent increase on figures from May.

Christine Farrell, Head of the Residential Property department at Wilson Nesbitt solicitors, commented that "the decision to go fixed or variable with a new mortgage always contains an element of the unknown, as you are trying to consider what the economic situation will be for the next 3 years; something financial forecasters even struggle to do with accuracy. It is important that anyone remortgaging take independent financial advice to best weigh up their options."

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