Remortgagors look to cash out £9,000
Figures from Mortgage Advice Bureau showed the typical remortgage customers in the first three months of the year had a home worth £248,191.
This figure has dramatically risen compared with a year ago, with properties now worth an average of £18,091 more – a rise of 7.9%.
At the same time the average remortgage has increased to £129,023.
The firm suggested homeowners are now withdrawing large sums of cash from their properties, rather than reducing their borrowing.
Customers were also happy to extend the term of their mortgage beyond the traditional 25 years, it said. Some 86% of people were happy to stretch their mortgage term past this mark.
Brian Murphy, head of lending at Mortgage Advice Bureau, said large house price rises had tempted many people into releasing cash from their home.
“Releasing cash is often a major incentive for people to consider remortgaging, whether to consolidate other debts, pay for home improvements or finance other spending,” he said.
“The fact that many people’s properties have gained in value over the last year offers some the chance to take the same percentage loan that they would have done if they remortgaged 12 months ago and give themselves a significant cash boost.
“Another benefit of rising house prices is that fewer people will be trapped in negative equity and more people will be in a position to negotiate a remortgage deal. Those who are not motivated to release cash can still make big gains by cutting their rates by taking their pick of the attractive deals on offer.”