Remortgage loan values reach record high
Average property values for remortgages rose to exceed £300,000 in July, although the typical equity in homes fell by £3,000 from the month before to stand at £130,000.
In further evidence that borrowers are cashing in on their property values, typical loan-to-values increased from 55.4% in June to reach 56.5% in July.
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “Homeowners have benefited from significant house price rises in recent years. For example, someone who bought their house five years ago may have seen the value of their home soar by almost a third, according to the Office for National Statistics. As a result, many homeowners are in an ideal position to use their property to release extra funds.
“However, opting for a higher LTV means borrowers may have higher monthly mortgage repayments to contend with – and could end up paying more over the full duration of the loan. Borrowers coming to the end of their current mortgage deal will need to decide whether to prioritise reducing their overall mortgage debt or releasing cash for the here-and-now.”