Lenders are becoming more cautious with "cheapest remortgage deals"

Lender's cheapest remortgage deals are beginning to change as lenders balance caution against the competitive edge needed by home-owners seeking remortgage products.

For a long time home-owners benefited from the competitive nature of the mortgage lending market. Remortgaging was cheap and had very attractive incentives such as free legal work and valuations. Many remortgage products offered fixed rates which were close to remortgage trackers.

Due to the eurozone crisis and troubled UK economy, lenders have begun to see more risk and have begun to replace their competitive edge with caution. The cheapest remortgage deals offered by lenders are beginning to be replaced by ones with slightly higher interest rates.

It is expected that the Bank of England’s Monetary Policy Committee (MPC) will leave the standard base interest rate at 0.5 per cent. However, a lack of Monetary Policy Committee action will not mean lenders will leave their offerings set. Without signs of any clear economic recovery lenders are likely to continue with their cautious outlook. Remortgage deals will reflect the nature of risk perceived by lenders, and most probably interest rates will rise slightly and loan to value levels will lower.

Despite the cautious outlook by many lenders some have held back and are still prepared to offer their cheapest remortgage products to home-owners. Home-owners wanting to switch their mortgage are recommended to take a serious look at deals available on the market to find a product to suit their needs while current remortgage rates remain cheap.