Homeowners should only consider the option of remortgaging when the rate is excellent compared with their current product.
This is the suggestion of Tim Lambert, head of investment property at Parallel Investment Management, who noted that while the choice is available to mortgage holders, most people will find such a move does not offer them a better deal at present.
The industry figure claimed it is unlikely individuals might uncover more favourable conditions than those proposed three or four years ago.
“With money earning nothing in the bank, many homeowners are using the current climate to invest in adding value to their own homes through extensions and loft conversions et cetera,” he pointed out.
However, re-mortgaging is a strategy often favoured by banks, as these institutes are paying down equity rather than new debt – a practice that might offer greater security in the long run.
Mr Lambert added such an approach can be dependent on repayment track record customer by customer.
His comments come after chief executive officer of Firstrung Paul Holmes recently labelled the government’s plans to guarantee 100,000 new mortgages at up to 95 per cent loan-to-value for new build properties a “whitewash”.
