= remortgage BOOM!
The combination of rising house prices and super low rates of interest has encouraged UK homeowners to re-think their mortgage requirements. Many are “making hay whilst sun shines”, remortgaging to secure and fix a low interest rate for the long-term. Others are choosing to draw equity from their properties, as the low rates against the raised property valuation, allows them to do so, with often moderate monthly repayments.
This does not constitute advice and advice should be sought in all instances before acting on it.
Your property may be at risk should you be unable to maintain any agreed mortgage payments over the term agreed.
Homeowners are releasing equity from their properties
With serious talk of the Bank of England (BoE) increasing their base rate in the not too distant future, property owners with variable mortgages have been racing to secure the best fixed rate “whilst stocks last”!
However, another group of homeowners have also been keen on remortgaging lately – those who are extracting equity from their property, perhaps to go towards another investment or retirement plan.
With properties now increasing in value, the equity is suddenly higher, which subsequently affects the “loan to value” (LTV). This is the amount that a lender calculates when deciding the level of funds they are able to lend and it is based as a % of the property value. Since the start of 2015 the average LTV has increased from c55% to c56.5%.
July 2015 – super month for remortgages
In July 2015, lenders approved more remortgages than any other month in the last four years. Almost 25,000 loans were agreed lending a total of £4.1 billion! That’s 1 billion more than in July 2014.
The Mortgage Advice Bureau report that the average remortgage loan is now over £170,000, an increase of 5% since the start of 2015. The average price of the houses being remortgaged has also increased from £296,o00 to over £300,000, in the last six months.
Market experts continue to communicate to borrowers who are not currently reaping the rewards of the current rate situation, that they should look to change their arrangement soon as the likelihood of waiting further could be costly.
Dental & Medical Financial Services help doctors and dentists secure mortgages with the best rates possible. Our mortgage calculators help us advice accordingly and we have excellent relationships with specialist lenders. Call today to discuss your requirements.
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