Mortgage rate warning issued

Homeowners looking to remortgage are in financial danger because of the credit crunch, new research suggests.

Analysis by market research company Mintel shows that lenders are more cautious and mortgage holders could be offered less attractive terms when it came to remortgaging.

Some nine per cent of current mortgage holders could be classed as sub-prime and therefore risky, it said.

Furthermore, up to a quarter of the 16.5 million mortgage holders could be considered high-risk for lending because of their job or personal circumstances.

Senior finance analyst Toby Clark said: "Many more mortgage holders will be offered less than favourable terms when they come to remortgage.

"Those coming off fixed-rate deals taken out before the recent interest rate rises will be particularly hard-hit."

Drew Wotherspoon of mortgage broker John Charcol suggested that a lifetime tracker mortgage could provide home buyers with peace of mind that interest rates and economic climate would not impact upon their monthly outgoings.

back