Now is the time to remortgage

Photo: Images_of_Money

Now is the time to remortgage your home, as homeowners race to cash in on rising prices.

House prices continue to steadily climb, as demand stays strong in the face of limited supply. With rates now remaining at historic lows, following Bank of England governor Mark Carney’s decision to delay any increases, homeowners are able to take advantage of their increased equity without the cost of rising rates.

New figures from the BBA show that consumers were quick to respond. The number of mortgage approvals in December was 24 per cent higher than a year ago, with house purchase up 19 per cent – but that rise was eclipsed by a 31 per cent surge in remortgaging.

Gross mortgage borrowing of £12.4 billion in December was 24 per cent higher than a year ago and overall new borrowing in 2015 was some 6 per cent higher than the previous year.

Brian Murphy, Head of Lending at Mortgage Advice Bureau, comments: “Savvy homeowners sitting on growing housing wealth drove mortgage lending in December, with the number of remortgage approvals rising by almost a third annually. The remortgage market was left battered and bruised by the recent recession, but 2015 saw the greatest number of remortgage approvals in four years. As house prices climb and mortgage rates remain low, now is an excellent time to switch to a new mortgage deal.”

Those taking out a loan for house purchase, on the other hand, are having to take on increasing levels of debt, with the average value of a purchase loan reaching a record high of £177,000.

“Systems are in place to ensure that borrowers don’t overstretch themselves, but this paints a worrying picture of affordability for first-time buyers,” adds Murphy.