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Remortgage buyers at record levels helped by low rates for loans

The number of remortgage buyers and value of borrowing have reached record levels helped by record low interest rates.

Research from UK Finance shows the number of homeowner remortgage buyers for the month of October are 41,100 a rise of 16.1% over the month and 16.4% higher than the figure for the same month a year ago of 35,300.

The total value of loans advanced is £7.3 billion an increase of 15.9% over the month and 17.7% higher than the figure of £6.2 billion for the same month a year ago.

June Deasy UK Finance’s head of mortgages policy said, the number of loans for remortgaging have been at record levels; this trend looks set to continue further as we head towards the end of 2017.

Mortgage repayments as a proportion of income still remain at or close to their historic low point due to low interest rates.

Record low mortgage rates

Capital and interest payments for new loans remain low for remortgage buyers, home movers and first-time buyers reflecting a competitive marketplace.

Despite the recent base rate rise we can expect monthly mortgage payments to remain affordable for the vast majority of borrowers, says Ms Deasy.

For buy-to-let investors remortgaging accounts for 70% of all lending with a strong increase in loans advanced up 20.5% from 12,200 in September to 14,700 in October with a rise of 21.5% over the year.

Over the month buy-to-let remortgage loans by value have increased from £2.0 billion in September to £2.4 billion in October compared to new house purchases of £900 million.

Low interest rates is good news for older homeowners with higher activity from equity release mortgage buyers able to access wealth in their property for holidays of a lifetime or pay university fees for grandchildren.

Mortgages affordable for homeowners

For home movers the capital and interest payments are stable at 17.5% of income and are unchanged compared to the same month a year ago.

The loan to income ratio is 3.41% and slightly up from 3.38% a month earlier based on borrowing in October of 179,494 and average household income of £55,000

For first time buyers the capital and interest payments remained stable at 17.2% of income and is 0.1% down on the same month last year.

Average borrowing in October was £138,750 with household income of £40,946 giving a loan to income ratio is 3.60% which is slightly lower than the 3.61% in September.

Loan to value (LTV) is an important metric as the lower figure, the cheaper the interest rate from the lender and for home movers this is 72.4% whereas for first time buyers it is 84.7%.

What are your next steps?

Talk to our London City Mortgage brokers for advice if you remortgage your existing home and want the best mortgage deal or release capital, buying your first home, moving home or are a buy-to-let investor.

For older homeowners releasing equity from your property, our LCM mortgage advisers can recommend the lifetime mortgage, accessing wealth to maintain your lifestyle, pay for care at home or even buy a more expensive home.

Start with a free mortgage quote or call us and we can take your details. Learn more by using the equity release calculator, mortgage monthly cost calculators, and property value tracker chart.

Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.

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    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.


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