Mark Carney isn't the only thing driving the current boom in remortgaging activity, new figures will show today, with a stark increase in the number of divorcees rushing to secure financing.
The proportion of borrowers remortgaging due to separation or divorce rose by three per cent in May as borrowers swapped a summer of love for financial stress.
New figures released by conveyancing service provider LMS show that the proportion of borrowers remortgaging due to divorce or separation from a partner increased to five per cent of the market in May – up from two per cent the previous month. Remortgaging to pay off debts also rose from 13 per cent of the market in April to 16 per cent in May.
Reaching the end of a fixed rate deal was shown to be the most common reason for borrowers to remortgage in May (63 per cent), whilst 26 per cent did so to fund home improvements.
Nick Chadbourne, chief executive of LMS, said: "While most borrowers remortgage to switch deals or save money, we have seen an increase in remortgaging for different reasons this month, including homeowners remortgaging due to divorce or to pay off debts."
Five-year fixed rate mortgages remained the most popular type of product when refinancing, although demand had dropped five per cent from April when 47 per cent of borrowers chose these deals.
Chadbourne added: "Demand for five-year fixed rate remortgages remains historically high as borrowers look to protect themselves from a potential base rate increase later in the year. While the popularity of five-year deals has dipped slightly month-on-month, they continue to dominate the market as borrowers lock in current rates for the long-term."
Also in May, equity released through remortgaging reached its highest level in 10 months at £22,600, up from £14,600 the previous month. This is the result of a decrease in the average redemption value, which fell to £143,000 from £162,000 in April.
[contf]
[contfnew]
CityAM
[contfnewc]
[contfnewc]
