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12 July 2006
Remortgaging has surged in popularity, according to new figures, with lending to remortgagers accounting for 38 per cent of all loans in May.
Figures from the Council of Mortgage Lenders (CML) showed that remortgaging was 17 per cent higher in May than at the same time last year, and increased from 80,000 loans in April to 99,000 loans in May.
The growth in remortgaging reflects the re-financing of several fixed-rate mortgage deals that are now coming to an end, as well as a stable housing market, the CML said.
Expected interest rates rises could also be playing a large part in the rising popularity of remortgaging, claims senior economist at Lloyds TSB, Jeavon Lolay.
Although the Bank of England recently voted to hold interest rates at 4.5 per cent, a rates hike later in the year is widely expected, and remortgagers could be rushing to make the most of attractively priced loans.
Controlling growing debt could be a further factor boosting consumer take up of remortgaging deals.
"Maybe because there is higher consumer debt, they are now looking at remortgaging as a way of containing that debt," explained Mr Lolay.
If you are worried about high levels of consumer debt and the effect that it could have on your credit rating, order your credit report now and find out where you stand financially.
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