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Because of the continuing low rate environment, a new study has found that there are nine new mortgages for every remortgage in the UK right now.

Figures from the estate agent Spicerhaart found that 89% of mortgages approved in August were for purchases with just 11% going to remortgages.

The Bank of England base rate is at just 0.5% and many predict this will continue for months and years. As a result, tracker and variable rates have sunk to new lows, and any holders of these type of loans will not want to move.

Steve Cox, operations director of Spicerhaart Financial Services, says regardless of the type of mortgage, any approvals are good news: “The upward trend for house purchase loans is extremely encouraging and shows that people will continue to move despite the current climate."

While there is nothing wrong with sticking with a variable rate loan, a good mortgage borrower has to look to the long term – there are still reasonable fixed rates on the market, and even for those on their lender's standard variable rate a tracker might be a good bet in the long run.

If you are unsure as to what is your best mortgage option, talk to your mortgage adviser. It might be that the lender's SVR is the best option, but you might find that a remortgage will save you money over the long-term. Waiting and hoping that rates stay low forever is a bad idea – if the Bank decides to increase rates, SVRs will rise very quickly and borrowers will suffer an almighty rate shock. So act now, before it's too late.

SOURCE: SpicerHaart, 06/10/09

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