Remortgaging activity saw substantial growth last month as improved affordability and record-low rates encouraged more borrowers to look for better deals.
The number of remortgage loans in July climbed to its highest level since November 2008, the latest data from LMS shows.
There were 46,423 new loans in July, which was 47 per cent higher than in the previous month of 89 per cent higher than a year ago.
Gross remortgage lending went up 41 per cent compared to June and 89 per cent from July 2014. The total amount was £7.2 billion, the largest on record since October 2008.
The total amount of equity withdrawn from remortgaging in July stood at £1.27bn, up 16 per cent from June and up a staggering 183 per cent since July of last year when equity stood at only £449m. This was also a record amount, the largest since April 2008.
Commenting on the data, LMS chief executive Andy Knee, said:
“Remortgaging has come back with a bite in July, following sluggish levels of activity throughout the latter part of 2014 and first months of 2015. We are confident these levels will be maintained with a steady stream of customers for the remainder of the year as record-low affordability encourages borrowers to lock in competitive rates.
“Despite news that a base rate rise may be on the cards, lenders have not hiked rates and there are still many excellent deals to be had as lenders compete for business. But these will not last forever and borrowers should consider remortgaging now to avoid missing out.
“The current economic climate and rising average incomes mean households are typically less stretched then previously. Remortgaging has never been as affordable and can offer huge monthly savings as the gulf between new purchase and remortgage payments as a percentage of income grew, to 2.7%*. A six year high in the amount of equity withdrawn through remortgaging shows financially shrewd borrowers are keen to capitalise on these potential savings.”
