The fear of rising interest rates have left many homeowners panicking and subsequently looking to remortgage, the Bank of England has claimed.
Bank of England stats showed a 42% jump in the number of people remortgaging, compared with the same month in 2009.
In November, 34,262 switched their loan to a rival bank or building society, the highest number for two years. This figure compares to 23,973 in November 2009.
The base rate has been stuck at 0.5% since March 2009, the longest period of frozen rates since the aftermath of the Second World War.
Howard Archer, chief UK economist at the consultancy IHS Global Insight, said: “There seems to be an increasing risk that the Bank could raise interest rates earlier than expected in 2011 to counter above target and rising inflation.”
Melanie Bien, director of independent mortgage broker Private Finance, who predicts the base rate could double by the end of the year, said: “The remortgaging market has been dead in the water. But it is coming back to life. People are now taking the plunge because of the fear that rates are going to go up.”
Family income has taken a hit this month from higher VAT bills, whilst the general rising cost of living and the impending National Insurance rise in April is leaving people with a shortfall to make-up, invariably sought from their mortgage bill.