Newly released figures from the Bank of England this month show that remortgaging borrowing figures spiked in July 2022 while regular net mortgage borrowing figures dipped slightly. In June 2022, net mortgage borrowing figures for the country were recorded at 5.3 billion pounds however, in July these figures dropped to 5.1 billion pounds. In comparison, remortgage approvals went from 43,300 in June 2022 to 48,400 in July 2022. The actual value went from £14.8bn to £15.3bn. Not a huge difference but definitely worth looking into.
Net Mortgage Borrowing
This drop in net mortgage borrowing and increase in remortgage borrowing figures, in our opinion is a direct result of the rising cost of living and rising interest rates. And they are only likely to increase more over the next few months. As energy bills and food prices go up, we can only assume that people who were considering either buying their first home or moving house have decided to sit put for a few months and see how things play out. That would possibly explain the decrease in standard mortgage borrowing figures. The drop in mortgage borrowing figures could also be a result of people not wanting to borrow as much as they normally would, in fear of their debt and monthly repayments being too high.
On the remortgage front, we are quite pleased to see that these figures are going up as this is exactly what we are recommending our clients do. People who currently have a mortgage urgently need to speak to a professional mortgage advisor who can assess their current deal and make sure that they are financially protected from rising mortgage costs. Thousands of people are reaching the end of their fixed periods and more shockingly, thousands of people have finished their fixed people and are currently sitting on the lenders extortionate SVR.
Although rates are rising, it is a good idea for you to secure a new rate now, if you can. The idea being that you get a new rate, while they are relatively low, and don’t risk having to settle for an even higher one in a few months time if the rates keep on rising. When the rates do eventually go back down, your mortgage advisor will then help you to remortgage back onto a lower rate. Therefore avoiding overpaying on your current mortgage.
What The Experts Say
Louis Mason from Oportfolio Mortgages had this to say:
“These figures, to us, confirm what we predicted and give us re-assurance that what we are recommending to our clients is the best route forward. We have been contacting our clients over the past few months and running financial health checks with them to make sure that their current mortgage deal and protection deals are the most beneficial for them in this uncertain economy.
Where necessary, we are helping our clients to remortgage or product switch their current mortgage to get them a better deal that will last them through the next few years. The fact that remortgage figures are increasing shows that others are doing the same thing as this is the smartest move. We aren’t just helping our existing client base however, we can help anyone who has a mortgage to get financially secure. No matter if we originally secured your mortgage for you. And it couldn’t be more simple.”
If you or anyone you know has a mortgage already and wants to discuss your current deal, please feel free to give our advisors a call today to see how we can help you too.