Remortgaging reaches nine-year high as UK homeowners cash in
Last December, British homeowners tapped into a staggering combined property wealth of £837 million – marking the largest amount of equity withdrawal over the Christmas period in the last nine years.
According to property experts, 2015’s historic low interest rates encouraged homeowners to remortgage on to a cheaper deal, with the average equity figure withdrawn via re-mortgaging per person sitting at a very healthy £30,361.
The last time collective withdrawal through remortgaging hit a higher figure during December was back in 2006, before the recession, when UK equity withdrawn totalled £1.4 billion.
But with the Bank of England signalling no plans to hike the 0.5 per cent base rate, and an estimated 90% of banks and building societies in a so-called “price war”, savvy homeowners were easily able to breach that amount, quickly realising that they could exploit the value of their homes to pay off debts and buy big ticket items, like new cars or kitchens, without having to increase the cost of their monthly repayments.
Charlotte Nelson, from comparison website Moneyfacts.co.uk, said: “Mortgage payments are one of the biggest financial outlays a homeowner can have, so it’s a no-brainer to grab a low rate deal while they’re still available”.
“Of course, borrowers need to look at the mortgage as a whole to ensure they get the best deal to suit them. But by taking advantage of the rates on offer today, they could end up saving significant figures.”
Please note the contents of this blog are given for information only and must not be relied upon. Legal advice should always be sought in relation to specific circumstances.