Falling house prices 'will prevent remortgages'

Date:Monday 17th November 2008
Author: Max Freedman

Millions of people looking to remortgage will be suffer as house prices fall, it has been reported.

The Daily Mail explains that as house prices drop, equity is reduced and millions of people seeking remortgages will either be forced on to worse rates or be unable to find a deal at all.

It stated that mortgage companies impose penalties upon people with less equity.

The paper urged homeowners to act quickly to offset dropping house prices.

Homeowners whose mortgage deals end in the next six months were advised to consider reserving a new one while there is still sufficient equity in the property.

According to the Mail, the best fixed-rate mortgages are from Abbey.

But it also found that only Abbey, Alliance & Leicester and Lloyds TSB have launched any new rates after the 1.5 percentage point cut in the Bank of England base rate and that no tracker mortgages are available for people with less than 25 per cent equity.

Recently, Scottish paper the Daily Record told remortgagers to seek a new deal six to eight weeks before their current rate finishes, allowing time for the remortgage process and for switching as soon as the deal ends.