Remortgaging has hit record numbers as
homeowners take advantage of good interest rates. Figures for last month showed that new
remortgage business was worth £11.7 billion. This amount used to be loaned out in one year just ten years ago.
The Council of
Mortgage Lenders published figures that showed a huge rise in people switching
mortgages to make use of competitive deals.
Recently
remortgaging has seen a growth with the value of remortgaging rising steadily over the past few months. The value of remortgaging in September was nearly £12 billion whereas January was £8.7 billion.
There are also signs that people are now looking for the security of a constant repayment figure as
fixed rate mortgages have hit an all time high. Once the fixed rate period finishes, the interest rate can increase considerably, by looking elsewhere homeowners will be able to find better deals.
Simon Tyler, from Chase de Vere
Mortgage Management, said: 'Today's mortgage deals are highly competitive and people are more aware than ever before about the benefits of switching.'
Jane Hewin, from the
Nationwide, said: 'Around 200,000 fixed-rate deals came to an end this summer. Borrowers who had enjoyed the security of some excellent deals when the base rate was just 3.5 per cent in the summer of 2003 faced the prospect of paying much more for their mortgage if they did not remortgage.'
For some remortgaging is used to spend money on
home improvements or paying off debts if they are luck enough to see their
property value increase over the last few months.
The news is still not good for
first time buyers who are looking to borrow 3.2 times their salary. This figure is at an all time high as the borrowing multiplier is normally two times their salary. First time
buyers are taking out mortgages of £114,000 for a property valued at £130,000 with a deposit of £16,000. If the young person lives in London or the South East, the most they could
buy is a studio flat.
Michael Coogan, the CML's director-general, said: 'The doom-mongers prophecies look to have been wrong as
lending has continued to strengthen over the summer.
'Although the market remains far from spectacular in terms of transaction numbers and
house prices, the prospect of a significant market correction are receding.'
