Remortgage to secure your finances

Adam Williams
Written By:
Adam Williams

Homeowners have been warned that they need to take steps to ‘safety-proof’ their future finances.

Data released this week by the Council of Mortgage Lenders showed repossessions had fallen to the lowest rate since records began.

In April, May and June the average repossession rate was 0.02% – equivalent to just 1 in every 5,000 mortgages. Arrears also fell during this three month period, the trade body found.

Brian Murphy, head of lending at Mortgage Advice Bureau, said this showed consumers were keeping track of their finances but he warned that rates would only rise from this point.

“A record low for repossessions and the falling number of loans in arrears have been two of the big success stories for mortgage borrowers in the post-recession era.” He said.

“Both measures continue to show signs of considerable improvement, and consumers are clearly finding it easier to keep their personal finances from slipping away from their control.

“The record low base rate has played a big party in helping households keep their loan commitments in check. The prospect of a higher base rate is clearly the biggest single factor that threatens this progress, but rate rises will be slow and steady – giving consumers plenty of time to adjust. The tightening of loan criteria following the Mortgage Market Review (MMR) will also help keep things on a stable footing moving forward.”

Government figures for unemployement indicated a rise in the number of people without a job, and Murphy said borrowers should take action to ensure their finances are in top shape.

“Unemployment figures show the timing of the first rise remains a moving target, but homeowners should still take the chance to safety-proof their finances well in advance,” he added.

“Locking into the current rates before the winds change is likely to prove a wise move, and there has seldom been a better time to seek a well-priced remortgage deal.”