Homeowners are increasingly choosing to take out additional loans against their properties at current favourable rates, according to the latest figures, amid fears interest rates will soon rise.
Figures from UK Finance, the trade body that now includes the Council for Mortgage Lenders, reveal gross mortgage lending was up nearly five per cent year-on-year in February, but, at £19bn is below the monthly average of £21.4bn for 2017.
However remortgage approvals in the month are up over nine per cent in both number and value compared to February 2017.
Eric Leenders, managing director for personal Finance at UK Finance, said remortgaging was driven by speculation over rate rises.
“There has been an increase in remortgage approvals compared to last year, as borrowers look to lock in to attractive deals amid speculation of further interest rate rises later this year,” he said.
David Hollingworth, from mortgage broker London & Country, agreed.
“Rates are already rising,” he said. “People are worried that they are going to miss the boat, and they have missed the very lowest rates, but they are still historically very, very low.
“With buy -to-let, remortgages are up too, but for slightly different reasons. As customers hit the end of the tax year and changes to mortgage interest and taxation they may be shopping around for new deals.”
The figures also showed growing levels of credit card debt with outstanding levels of card borrowing growing at a rate of 6.3 per cent over the year, while use of loans and overdrafts continued to fall.
