The Euro turmoil is starting to affect the biggest countries in the EU now, and for the first time in around a decade the UK is now able to borrow on cheaper terms than Germany. German 10 year government debt rates increased to 2.21% whilst the UK, relishing it’s new found “safe-haven” status, sits at a mere 2.16%.

This is hugely significant, and will up the pressure on Merkel et al to sort it all out once and for all. With the markets becoming more and more convinced of an EU zone break up of some description, the politicians seem to be stuck in a holding pattern of indecision.

Back on our fair Isle, however, although there is a growing movement against austerity cuts, there is a general acceptance that, hard as it is, these things need to be done to chart a safe passage through stormy times.

Today UK growth was confirmed at 0.5% in the 3rd quarter of this year and earlier this week the Government launched its much anticipated Housing Strategy, pulling together a range of announcements with a couple of new ones to try to stimulate growth and return some confidence back to the house building industry.

Whether you agree with the content of this or not, the point is that at last the Government is trying to do something to help stop a housing issue become a full blown crises. Having been fortunate enough to discuss the report over lunch with the Rt. Hon Grant Shapps MP yesterday at the House of Commons, it was refreshing to see the passion behind the policies.

In the meantime more lenders have increased their rates further, with at least one other lender also increasing their variable rate. We are beginning to see the expected increase in remortgage business as a result.

With rates available from just 2.29% on a tracker basis (The overall cost for comparison is 3.80% APR), or 2.58% fixed until 31/01/2014 (The overall cost for comparison is 4.70% APR), 2.94% fixed until 28/02/2015 (The overall cost for comparison is 3.50% APR) and 3.39% fixed until 31/01/2017 (The overall cost for comparison is 4.00% APR), all with free legals and free valuations, it is an excellent time to reserve some outstanding products.

This rise in rates I am alluding to is due to two things; firstly, as the storm in the Eurozone does its best to turn itself into a full scale hurricane of a banking crisis, because quite simply the cost of funds looks set to rise and secondly, liquidity issues are once more emerging from the shadows.

Given that almost every report seems to suggest we are heading, if not towards another full-scale recession, but a period of stagnation that feels like a recession anyway, it will come as no surprise that the MPC has decided to print more money, entering into another period of Quantitative Easing, (QE) a month earlier than initially expected. Another £75 billion, slightly more than thought, will be pumped into the system.

On the back of the US’s “Operation Twist”, which in essence involves the Fed selling short-term bonds and, here’s the twist, replacing them with longer term ones, (the result being that as more long-term bonds are purchased interest rates should fall), there was pressure on the Bank of England to do their bit.

As for the Euro issues turning into a banking crisis, we have already seen the first casualty in the shape of the Belgian / French bank Dexia which is about to enter into a Northern Rock style arrangement. Although the Europeans have talked positively about supporting their banks and of course Greece, it seems the markets do not quite believe them and need to see a concrete plan of action.

All this means there is a very high probability that, whilst the UK banks are undoubtedly in a much better position that our Euro counterparts, lending levels will be affected in the coming months. Almost every lender I have spoken to has said the same; unless things change they expect funding costs to rise and therefore mortgage rates on offer will rise accordingly.

With all of this mind and whilst we are experiencing some of the lowest rates for a generation, it does seem that the time to act is now. For those looking to remortgage there are now many products that are available at less than even the lowest Standard Variable Rate and some highly competitive fixed rates.

Tracker products start at 1.98% for 2 years, (the overall cost for comparison is 4.60% APR) and fixes now start at just 1.99%, (the overall cost for comparison is 5.30% APR), which is the lowest 2 years fix anyone can remember, a fantastic 2.69% (the overall cost for comparison is 3.40% APR) for 3 years and 5 year fixes available at an astonishing 3.29% (the overall cost for comparison is 4.90% APR).

Remember most offers are valid for 3 to 6 months, so if Chancellor Merkel et al do get their act together and rates improve again there will still be options.

The good news is that this is actually a myth. There is no mortgage shortage and lenders actually have begun to compete for your business. How else can you explain the new trend of 7 day sales from certain lenders who are offering tracker rates from as low as just 1.99%, (4.0% APR)?

Meanwhile, 2 year fixes are now down at 2.68%, (3.5% APR) and 5 year fixes are available at  just 3.89%, (4.1% APR), so from a product point of view this year really does seem like the best time to lock in to a great product.

In fact, according to a report by Moneyfacts, mortgage rates are now the lowest they have been for 23 years, not only due to the expectation that rates will now not change this year, but also because lenders are finding it cheaper to raise funds in the financial markets and have more of an appetite to compete.

Apart from these rate reductions, the interesting thing is the amount of innovation that has re-appeared in the market, with lenders looking to assist on the more difficult transactions. Even at the higher Loan-To-Value (LTV) levels, where we have seen a dramatic increase in products available up to 90% LTV, lenders are now more often than not looking to assist.

Affordability calculations and credit scores have both become more realistic rather than just lax, helping to ensure that the right borrowers are matched with the right loan amounts.

Of course in this new era certain people will still struggle, those with credit issues, looking to stretch income to levels that are just too high to justify and those without at least a 10% deposit. However this is no bad thing and time taken to save for a deposit and rectify past credit mistakes is a good thing.

The biggest real change is around interest only. No longer are those who can only afford the loan on an interest only basis, with no thought about how they are going to pay the loan back, able to do so. Again, this is no bad thing.

The above does not however, constitute a full scale mortgage crisis. More and more we are seeing loans go through in the more difficult areas. So if, for example you have a property above a shop, a property split into 2 or more units or with a short lease then there are some good options.

Alternatively, if you are a borrower looking for high LTV’s on a property above £1m, a buy-to-let for a 1^st Time Buyer or a mortgage based on commission income or only one years of self-employment then do not despair.

Whilst things are still tough, they are nowhere near as tough as the press would have you believe.

Lenders are lending and mortgages are available; and at exceptionally low rates.

After all, nothing is better than panicking people into action than a short, sharp shock.

The truth is that it might not be quite that simple and could provide as many problems as it solves. For many consumers, a sudden half point rise could prove to be the tipping point, especially if it is followed by another one or two increases later on in the year as predicted.

Leaving aside the fact that I believe rates should rise slowly and steadily to help manoeuvre us into a better position to stave off the longer term inflation threats, it is true that a rate rise in May will prompt a small flurry of activity in the remortgage world.

Of course we will all be grateful for this extra business, but it may not translate into the massive increase in actual business that many believe. Firstly, some lenders are worried. They are concerned that the demand they will face from clients to move onto a fixed rate will cause them supply issues as they simply have not got as much money to lend as before. If they are deluged with remortgage business suddenly, something has to give.

So we could see higher than expected rate rises from lenders, which may put off many looking to fix in any case, or a further tightening of criteria to control business levels. Even now it is the supply of mortgages that is constraining the sector as many of us working on the front line know, not quite the demand issue that the CML often alludes to.

The biggest issues a rate rise brings will be faced by the “mortgage prisoners”. Those on high LTV’s or whose job situation has changed and are unable to remortgage onto a fixed rate, (hello!). These are most at risk and a 1% change over the next few months could see repossessions rise, a situation surely not good for anyone. The rates that are on offer for these customers are so high that the phrase “payment shock” becomes “payment panic”.

For me, rather simplistic as I am, lenders can do more to help this situation by offering their existing clients in such a position a more realistic fixed rate to help stave off this threat, something starting with a 4 rather than a 6 or even 7. I am sure there must be some room to manoeuvre here rather than letting customers get further into trouble as rates rise.

The point here, and it is not about being negative, is that if you are sitting there thinking a rate rise will be the answer to all your issues, then you are missing the point. There are many other things you could be doing than waiting for things that cannot be controlled.

As a wise industry sage recently told me, too many people sit there and say, “once this happens or that is out of the way things will get better”. But there is always another something that needs to happen before things improve, until you realise, as Alfred D Souza says “these obstacles were my life.”

Making the best of things now is what really matters, and there are still many opportunities as we will no doubt see in the coming months.

Quite apart from a tightening of criteria across the board, the scarcity of competitive products above 85% Loan-To-Value and headlines stating that mortgages are becoming scarce, you may find that the lender you took you mortgage with is now part of a different lender entirely with a whole new rulebook.

Add to this a debate as to the timing and the severity of the undoubted Base Rate rises to come and you can be forgiven for being a tad confused.

The good news is that things may not be as bad as they appear and there are still some highly competitive products around, including fixed rate products that are lower than they have been, or are likely to be, for a very long time. Many of these products also come with free valuations and free legals for remortgages if you know where to look.

I would always recommend that you do two things at this stage, usually around 3 months before your rate was to due to expire. Firstly, speak to your existing lender and find out exactly what options you have, then armed with this information approach an independent mortgage broker.

Trying to shop around not only for the best rates, but to find a lender that matches your current and future needs criteria wise is harder than it has ever been. A good broker will know the ins and outs of each lender, as well as have access to products that are only available through brokers.

It is the “advice” part which is important as many direct lenders just offer you a choice of products, without ensuring the product actually suits your needs not just now, but in the future, avoiding any nasty surprises later on.

Choose your next product very carefully as the next interest rate movement will be upwards. A low tracker product may be enticing but check you can still afford the loan if rates rise by at least 2% over the next couple of years.

Look for products with a “drop-lock” that enable you to benefit from a low variable rate now, with the option of switching to a fix without charge in the future.

A fixed rate will protect you in future and although you may lose some flexibility and pay a slightly higher rate to begin with, the peace of mind when rates do rise can ensure you do not suffer sleepless nights in the future.

This is of course good news for mortgage brokers and borrowers alike, after all more choice and more competition is what is badly needed.

The issues for many is whether they should fix now or enjoy a low variable rate tracker.

There has been so much contradictory economic data and press speculation in recent months, culminating in recent data showing that the UK economy grew more than expected in the last quarter, leading to renewed claims that interest rates may rise quicker than many first expected.

On the other hand this has been dampened by reports of a predicted fall in economic activity and house prices as the recent Government cuts start to bite. Even on the Bank of England’s’ Monetary Policy Committee itself we have two individuals at either extreme, one calling for immediate interest rate rises and the other for an increase in the Quantitative Easing campaign.

Trying to predict when rates will move is a dangerous game and for many now is the time to sensibly review their options and levels of affordability should rates increase by 1% or even 2% in the next year or so.

Throw in the fact that fixed rates have come down to very attractive levels, house prices are expected to ease further, (meaning that those looking to remortgage may fall into a more expensive interest rate band), and lenders have tightened their loan criteria, it could be that the time to take action is now.

After all, there are now some excellent choices whatever your individual views on interest rates are; trackers under 2%, five year fixes below 3.7% and products that allow you to enjoy a low tracker now and switch to a fix without penalty at any time. All with free valuation and legal’s for remortgages.

Don’t get me wrong this is all great, and will help many especially around areas like London, but the reality is it is still representative of the mainstream lenders battling it out in the low-loan-to-value arena, around 70% and below. In order to really help around the country as a whole however, there has to be more innovation in the higher LTV bracket, nothing stupid, just up to 90% LTV.

In other words helping those most at risk to rising rates from becoming mortgage prisoners.

It is a positive start, but there is much more to be done.

Some of us have already been talking about this since the start of the year, and it is nice to be backed up by some weighty reports. Moneysupermarket.com, for example, have stated that even when taking the new mortgage product arrangement fees into account the “best” fixed rate and the “best” tracker product over 2 years will beat the majority of lenders SVR’s.

With a lot of publicity around those mortgage lenders who have already increased their SVR’s recently and other lenders rumoured to be following suit, many borrowers are looking to mitigate the risk of further rises and taking advantage of some great fixed rate product offerings.

Others are finally jumping on the much trumpeted Offset bandwagon, with offset tracker rates below 3% currently this is a marvellous time to really make the offset work and shed years off the mortgage term.

Of course, it is important to note that whilst this is the case, generally speaking this only applies to those with at least 25% equity in their properties. Whilst this area of the mortgage market will always have the very best headline rates, the continued squeezing of lenders in this area has meant that some are beginning to look further afield for higher margins.

We have therefore seen not just an increase in mortgage products available at higher loan-to-values, with 90% LTV looking like the new 100% LTV, but also lenders are returning to the large loan and buy-to-let arenas.

The buy-to-let mortgage market is most interesting, as this seems to have started to return much quicker than many expected with lenders such as BM Solutions and The Mortgage Works actively looking for new business. BM Solutions have also made a tentative step at reducing the high percentage  Arrangement Fees that discouraged many and have reintroduced products with competitive rates and much lower, flat Arrangement Fees.

There is however, one potential drawback of this policy. The cost to lenders in terms of capital adequacy requirements of lending in perceived “riskier” areas or at higher LTV’s, means that overall lenders may have to lend less in pure volume terms. This is a worrying thought as lenders are not exactly throwing their, or rather our, money around at the moment.

Overall, it is nice to have a broader spread of mortgage products back and I suspect that lending will continue to ease, albeit it slowly over the remainder of the year. Whether rates remain this low remains to be seen, however, and I do believe that the first half of this year will be the best time to remortgage, potentially for quite a while.