BoE Data Reveals Strong Demand in February Lending for Remortgages and Mortgages

BoE Data Reveals Strong Demand in February Lending for Remortgages and Mortgages

The continued low interest rates are creating opportunities too good to pass over even in the midst of financial uncertainty during a pandemic. Mortgage and remortgage lenders are not only offering low interest rate deals, but they are becoming more competitive to grab the attention of borrowers. Loan to value (LTV) levels are rising making it possible for hopeful home buyers to get on the property ladder with lower deposits and remortgaging homeowners are finding more products available from which to choose.

According to the Bank of England, gross mortgage lending reached the highest figure in five years at £27.7 billion during the month of February. The main drive to mortgage was due to the expectation of the stamp duty holiday deadline approaching at the end of March. In rushing to complete a purchase, home buyers could save substantial amounts. In early March, the deadline for the tax relief was extended to June.

The February gross mortgage lending was 19% higher than the same time last year. It was 13% higher than January’s lending of £24.5 billion. 

The volume of house purchases in February, at 87,700, was a decline from the 103,700 found in November 2020, but higher than the 73,500 recorded in February 2020. Net mortgage at £6.2 billion was at the strongest level since March 2016.

Remortgage approvals recorded, which does not include product transfers, increased in February to 34,300 from the 32,600 recorded in January.

In other reports from remortgage lenders, homeowners were capable of saving over £200 per month with a remortgage due to the low interest rates available. In contrast, those that do not remortgage and are pushed over to the lender’s standard variable rate (SVR) are on average paying twice the interest rate level than they were used to paying on their current mortgage.

It is expected that mortgage lending to homeowners and home buyers will continue to be strong, and opportunities will spark lenders to be even more creative and competitive in their remortgage and mortgage offerings. Data in the coming months is expected to reveal that optimism in the housing market and in remortgaging will continue to reveal strong demand, especially as another stamp duty holiday deadline is on the horizon.

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