Bank of England Claims UK Households Paying Off Mortgages in Record Time
2 minute read
New data from the Bank of England has shown that British households have been paying off their mortgages at a record pace, with the first quarter of 2015 seeing mortgage debts cut by £13bn. The reasoning behind this seems to be the historically low interest rates in the mortgage market at the moment. Suggestions are that the low rates that the mortgage market is beginning to see have made the idea of reducing mortgage balances a far more attractive proposition than it has been in the past.
A Stark Change
This shift represents a stark change from how homeowners have previously approached paying off mortgage loans. In the years immediately prior to the financial crash, homes were used as a resource to finance items such as holidays, new cars and extensions onto existing homes. With the lessons learnt since the financial crash, homeowners have clearly become considerably more careful with how they handle their finances.
The Expert’s View
With the stability of base rate and the markets, combined with the continued competition from lenders, many borrowers are able to obtain lower interest rates when reviewing their mortgages or when arranging a new loan for their move. With many being much more aware of their finances and their budgets, we are seeing some of those that are obtaining improved rates looking to continue their current level of payment to reduce their borrowing and in turn their term. Of course the tide could turn when we see any possible increases in rates, but to many it seems good practice to utilize the money, that in their eyes, they have already budgeted for whilst they are able to. To discuss any of your mortgage needs, get in touch with Just Mortgage Brokers today.