One in two homeowners say they would remortgage when rates rose by 1%, says The MarketPlace at Bradford & Bingley.
Research carried out by The MarketPlace in October last year found that one in two homeowners would only consider remortgaging if rates were to rise by 1%. Since then, rates have risen from their historic low of 3.5% to today's figure of 4.5%.
The MarketPlace says with yesterday's base rate rise, the fourth in eight months, now is the time to lower the cost of borrowing and warns that a wait and see attitude could cost borrowers £2.5bn.
Elliot Nathan, mortgage development manager for The MarketPlace, says: “With further rises expected in the coming months now really is the time for borrowers to act. Our research revealed that apathy would rule until rates rose by 1% and we are now there. Although people should not be overly concerned as the base rate is still, in historic terms, low, the recent rises do provide them with a reason to look at lowering the cost of their borrowing.
“Borrowers with a £100,000 variable rate mortgage will have seen their monthly payments rise by approximately £60 a month in the last eight months, but many can easily do something to cut this cost.”
The research also showed that nearly two-thirds of homeowners would not be concerned about increases in their mortgage repayments until they had risen by over £50 a month. The MarketPlace says with many monthly mortgage payments now breaking this barrier, it provides even more incentive to remortgage.