Carney pledge makes variable rate mortgages attractive

By Natasha Adamson

Remortgagors are putting their faith in Mark Carney's interest rate pledge and choosing variable rate mortgages over fixed rate deals.

Interest rates have been frozen for 53 months now, and just as speculation was beginning to increase that a change was imminent, the Governor of the Bank of England, Mark Carney, sought to provide some reassurance by saying that interest rates wouldn't go up until the rate of unemployment drops to 7 per cent. At that time he speculated that it could be another 3 years before the rate of unemployment reached his target. Remortgagors have responded by turning their back on fixed rate mortgages, which until recently had been very popular, and are going for the more riskier but cheaper variable rate mortgage products. Information from the Mortgage Advice Bureau's National Mortgage Index suggests that the number of remortgagors taking a variable rate product more than doubled in just a month - up from 9.5 per cent to 20.8 per cent.

However, recent economic reports have suggested stronger than expected growth, and a number of analysts say the unemployment rate could hit 7 per cent a year earlier than envisaged by Mark Carney.

The figures also reveal that property purchasers still overwhelmingly go for a fixed rate mortgage product, with only 9 per cent going for a different kind of mortgage deal.

If you are remortgaging your house, and require a property solicitor to handle the conveyancing process for you, contact Wilson Nesbitt in Northern Ireland by calling 0800 840 9290.

Or submit your details online for a callback by clicking here.