Homeowners taking more equity – MAB

Homeowners taking more equity – MAB

The remortgage market perked up in the six months to July, with more homeowners extracting larger amounts of cash from their homes, data has shown.

Latest figures from national advisory firm the Mortgage Advice Bureau’s national mortgage index showed that July’s average remortgage was £170,094.

This was the largest amount since MAB began the NMI in 2009, while remortgage applications rose 35 per cent year-on-year. Those remortgaging were increasingly opting for fixed-rate deals to lock into competitive prices.

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According to the data, homeowners were cashing in on property gains rather than taking out smaller loans and decreasing repayments. The average remortgage LTV rose 1.1 per cent from 55.4 per cent in June to 56.5 per cent in July. Compared with the average LTV six months ago of 54.9 per cent, this is an increase 1.6 per cent.

The value of properties put up for remortgage reached £300,898 in July, the highest value since October 2014’s £305,592.

Adviser View

Ray Boulger, senior technical manager for London-based John Charcol, said: “If you have an unsecured debt then some will tend to try to switch this to their mortgage. But unsecured loans can be cheaper for some people than current high LTV rates.

“There can be a problem here in that both advisers and borrowers may tend not to take a holistic view and there has to be recognition that for some an unsecured loan makes more sense.”