Homeowners Remortgaging to Save Money and Pay Down Property Debt
More homeowners are paying down their mortgage debt and many are remortgaging to make a start at doing just that. Through remortgaging many home owners are safe guarding from any interest rate hike. By doing so they have assured that instead of paying extra toward interest payments they can use the cash to pay down debt. Some are remortgaging to deals that will be penalty free for overpayments.
According to Bank of England data, homeowners with mortgage debt paid back over £24bn to lenders in 2010, the highest since records began in 1970. In the last quarter of 2010 a record of £7bn was paid back which is the most of any quarter since the Bank started collecting such data. The Bank’s figures also included the mortgage paid down through purchase deposits. "Extremely low savings rates have made it much more attractive for many people to use any spare funds that they have to reduce their mortgages," said Howard Archer, chief UK and European economist at IHS Global Insight. Homeowners are looking to lower expenses from their household budgets and one way to do that is to reduce the cost of borrowing by remortgaging to a lower interest rate. Once a homeowner is sure they are in the best deal possible whether that is their current mortgage or a remortgage then paying down debt on the property will build up their equity. For those that can benefit from a lower rate or for those that have current mortgages that do not allow overpayments then there are deals to be found from lenders.