Homeowners are continuing to take advantage of the low interest rate remortgages currently available by lenders. Experts believe the trend will continue and grow stronger as the warnings for an interest rate increase by the Bank of England grows louder. Due to the increased values of properties, homeowners are also taking advantage of the remortgage opportunities and releasing equity when getting their new deal.

According to LMS, the equity cash release value of the average remortgaging homeowner has reached a new high. In August, the average value of equity release was more than £35,000.

LMS credited the low interest rate deals for attracting borrowers, but added that another incentive was that wages had grown by 3% year on year in August and that had helped homeowners affordability levels putting them in line for better deals and helped with getting an approval.

Meanwhile, overall remortgage activity has increased by 18% year on year in August.

Andy Knee, LMS director, said, “Rising house prices and low interest rates mean homeowners are withdrawing record sums of cash from their homes by remortgaging without impacting their loan-to-value ratio, as evidenced by a drop in new LTVs from 55% to 53% in August.

“However, an increase in average rates for the first time in nine months, however small, is an indication that we may finally be starting to see the end of record low products and competition among lenders, as rumors of an interest-rate rise persists.

“Despite a sign that the mood might be starting to turn, annual wage growth and the growing gap between mortgage and remortgage payments mean the affordability of remortgaging is better than it has been for years.”