Homeowners continue to pay off mortgages

Category: Mortgages
Date: 7/16/2010

Homeowners have continued to pay off their mortgages rather than take equity from their homes, the Bank of England has revealed. The Bank said around £3.2 billion was injected into housing equity during the first three months of the year. Despite being slightly down on the figure of £3.4 billion reported in the previous three month period, it is now two years since equity was last withdrawn from UK homes.

The figures suggest people are opting to cut back on existing borrowings rather than taking on new debt.

With interest rates remaining low and concerns over debt and unemployment persisting, people have been choosing to repay their mortgages rather than release equity from homes.

Many borrowers have been able to overpay on their mortgage repayments as a result of the low mortgage rates they are currently being charged.

Low savings rates have also persuaded people it is best to use their spare cash to pay down their debts.

The ongoing effects of the recession and the austerity measures revealed in the emergency Budget are likely to ensure that people continue to keep their borrowings to a minimum over the coming months.

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