MortgagesNov 6 2015

Low rates seal growth in mortgage borrowing

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Low rates seal growth in mortgage borrowing

Mortgage borrowing and credit card purchases remained strong in September from the previous year, thanks to low interest rates, the chief economist and head of research of the British Bankers Association said.

Richard Woolhouse said: “Borrowing figures in the mortgage market remain strong as customers take advantage of record low interest rates. In particular, remortgaging remains high as savvy customers secure attractive deals ahead of a possible rate rise.”

According to BBA data, mortgage approvals are up 24 per cent, with remortgaging up 40 per cent and house purchases up 14 per cent.

First-time buyers have also found good deals available, Mr Woolhouse added, while existing borrowers seemed to be increasingly switching to lower fixed rates to control mortgage costs.

Gross mortgage borrowing in September was £12.1bn, 17 per cent higher than it was one year ago.

Bubble: 24% rise in mortgage approvals over the past year

Adviser view

Jonathan Harris, director of London-based broker Anderson Harris, said: “Remortgaging numbers continue to be strong as borrowers take advantage of cheap mortgage deals and worry about the possibility of an interest rate rise.

“However, with Mark Carney, governor of the Bank of England, now suggesting that rate rises are a ‘possibility, not a certainty’, it remains to be seen whether borrowers will lose the urge to remortgage.”