Death of remortgaging 'overblown'

Claims the 1.4 million homeowners expected to remortgage will find refinancing impossible by a senior Financial Services Authority figure have been denied by lenders.

Earlier this week FSA retail managing director Clive Briault said many of the 1.4 million households on short-term fixed-rate deals looking to remortgage would "find it difficult - if not impossible - to refinance their mortgage on favourable terms".

However, Newcastle Building Society is claiming tales of the death of the remortgage market are greatly exaggerated.

"From this week’s headlines, many people will be forgiven for thinking that they won’t be able to get a mortgage or competitive remortgage deal from their lender next year," said Steven Marks, Newcastle's lending expert.

"Even though interest rates came down slightly this week, such a statement could leave borrowers feeling unnecessarily uneasy."

However, he went on to admit there were difficult times ahead in the economy and lenders would have to take a more responsible stance.

"But, apart from what is happening with Northern Rock and a small number of specialist lenders, other mainstream lenders are still keen to do business," Mr Marks added.

"I believe there will still be competitive deals out there for people next year."

Mr Marks explained although rates are now higher than two year ago, the cost of borrowing is at a historic low.

"Our clear message is: don’t panic and speak to your lender if you have any concerns.”

For the week's biggest personal finance stories and money saving tips sign up for the myfinances.co.uk weekly newsletter.