Record low rates boost remortgage market
Data from remortgage specialists LMS showed typical homeowners took £34,505 out of their property when remortgaging.
This is 81% higher than June 2014 and is the highest level ever recorded by this survey.
Across the whole market £852m was withdrawn, with borrowers tempted to remortgage by lower rates.
The firm said average remortgage rates had fallen to a record low of 2.59%, with borrowers being urged to refinance now ahead of interest rate rises towards the end of the year.
Monthly remortgage lending increased 1% to reach £3.7bn during the month, with the number of cases growing 9% from 22,700 in May to 24,693 in June.
Andy Knee, chief executive of LMS, said the remortgage market was providing attractive options for borrower looking to refinance.
“Record low rates of remortgaging and better affordability – repayments now equate to just 17.6% of income – have spurred people on to remortgage now for extra cash to spend or pay off other debts,” he said.
“There is a general sentiment of positivity throughout the summer, as families are able to remortgage for record amounts of extra income, but economic improvements are struggling to filter through to many families who still feel the pinch.”
Knee added: “It is, perhaps, a little hawkish for the central bank to raise the historically low interest rates, following Mark Carney’s words last week that rates may rise by January. A rise in interest rates, however small, would see outgoings increase, affordability tighten and place added pressure on struggling households.
“Whether or not an interest rate rise will come to fruition this year, borrowers need to prepare for the Bank of England rate raise. Now is the opportune time to take advantage of lender appetite and a low base rate, seek out the best remortgage deals on offer, and fix low rates before any change kicks in.”