The mortgage market is seeing more movement as approvals hit a six-month high, partly thanks to the low rates around at the moment. Bank of England figures show that 61,760 mortgages were approved in February – that’s a 1,000 rise on the six-month average figure.
Low rates are encouraging remortgaging, as well as first-time borrowing. Two-thirds of people who remortgaged in February said they did so because of the current low rates. Borrowers are using the money to pay off debts, reduce monthly payments, pay for home improvements and help children buy their own home. Around a third increased their borrowing, with some opting for an additional £10,000.
With inflation hitting a record low of 0% in March, and no sign of the Bank of England raising the base rate, the low-rate mortgage products look likely to continue coming. Lenders are expected to launch yet more deals this year, benefiting borrowers – current and new.
The lift in borrowing and approvals has also been put down to the abolishment of Stamp Duty on properties under £125,000 last autumn, and lenders getting to grips with tightened affordability assessments introduced last year. Positive news for home buyers and mortgage swappers alike.
We’ve been tracking new rates as banks and building societies release them – keep up to date on our blog posts on mortgages.
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