Homeowners are choosing to pay down mortgage debt versus taking on more debt, according to the Bank of England’s latest quarterly figures. This marks the 10^th quarter in a row that reported figures have pointed to mortgage debt reduction. The 3^rd quarter of 2010 saw collective debt cut by 6.1 billion pounds.

The trend of paying down debt contrasts the behavior of homeowners in the housing market boom years. In the last quarter of 2003 homeowners borrowed out of their properties a record 17.1 billion pounds.

Of course with debt reduction in the mortgage lending sector there will be less seeking lending or remortgages. The Council of Mortgage Lenders reported in November that lending fell 5% from October and was down 10% when compared with last year.

Chief UK and European economist at IHS Global Insight, Howard Archer said: "There is an ongoing desire and perceived need of many people to improve their personal balance sheets, given high debt levels and serious concerns and uncertainties over the economic situation.

"Extremely low savings interest rates have made it much more attractive for many people to use any spare funds that they have to reduce their mortgages."

The data does not however reveal whether the decline is due to homeowners seeking to reduce debt or that many are finding it difficult to obtain lending. Analysts do confirm that with low interest rates and many reverting to standard variable rates on their loans that it may be very wise to indeed seek out a remortgage. It could mean a savings in debt or monthly mortgage payments merely due to obtaining a lower interest rate.