Brits are cashing in on the rise in the value of their property by remortgaging, according to new figures from a broker.
The average remortgage loan reached a new high of £170,094 in July, the Mortgage Advice Bureau (MAB) said yesterday.
The data indicate that borrowers are opting to cash in on property gains rather than taking out loans to reduce monthly payments, the MAB added.
The number of remortgage applications jumped 35 per cent year-on-year, as borrowers reacted to the prospect of an interest rate rise. Many of those applying to remortgage were more interested in a fixed interest rather than one linked to the Bank of England’s base rate.
July saw comments from Bank of England officials suggesting the decision on interest rates would become clearer at the end of the year, with many expecting a rate rise in the first three months of 2016. But expectations of the first hike have since been sent back to next summer after as a dip in commodity prices hits inflation.
“Mortgage rates have been tumbling since the beginning of the year, and many borrowers have jumped at the chance to secure a low rate deal. However, a few high street lenders increased their pricing recently – suggesting we may fast be approaching the bottom of the curve,” said Brian Murphy, the MAB’s head of lending.