Remortgaging in the UK had its strongest July in more than a decade as homeowners moved quickly to tie into more cost-effective repayment deals ahead of an interest rate rise.
The Bank of England raised its base rate by 0.5 percent in August, immediately triggering mortgage lenders to increase their own interest rates, meaning a rise in repayments for any customers not locked in to a fixed rate.
The Bank’s monetary policy committee decided against a further rise in the base rate at its September meeting, but homeowners who are coming to the end of a fixed rate deal are well advised to start shopping around for a new deal that will fix their repayments ahead of a potentially turbulent 2019 as the UK leaves the EU.
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£8.7bn borrowed in July
New figures from UK Finance, the industry’s trade body, showed there were 46,900 new homeowner remortgages in July, up by 23.1 percent on a year ago. The £8.7 billion borrowed by those homeowners was up 26.1 percent on July 2017.
The number of new home-mover mortgages dropped to 32,600, down 3.8 percent on 2017, but home movers borrowed the same amount of money as a year ago, £7.3 billion.
According to UK Finance, the average home mover is aged 39 and has a gross household income of £57,000.
Meanwhile, first-time buyers borrowed £5.4 billion, the 31,400 completed mortgages up 1 percent on the year. The average first-time buyer is aged 30 with a gross household income of £42,000.
Locking into fixed-rate deals
Jackie Bennett, director of mortgages at UK Finance, said: “The residential remortgaging market saw its strongest July in over a decade, as homeowners pre-empted the latest Bank of England rate rise by locking into attractive fixed-rate deals.
“The number of first-time buyers has returned to modest year-on-year growth. However, affordability remains a challenge for many prospective borrowers, underlining the importance of clarity over the future of schemes such as Help to Buy.”
Quality conveyancing services from Homeward Legal
Savvy homeowners who are looking to fix their mortgage repayments and are already remortgaging can call on Homeward Legal’s panel of conveyancing solicitors, who have the expertise across England and Wales to complete a remortgaging transaction.
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