Remortgage equity withdrawals surge to record high

The average amount of equity withdrawn via remortgaging hit a new record of nearly £37,000 per borrower in November.

This is a massive 76% year-on-year rise, with the average loan amount just £20,906 in November last year.

The average amount of equity withdrawn from remortgaging was £36,894 per customer in November, up 27% from £29,027 in October.

Many homeowners use pre-Christmas remortgaging to raise much-needed cash, according to LMS, which produced the figures.

The total amount of equity released by remortgaging reached £1.1 billion in November, 16% higher than last month and more than double the £0.5 billion recorded in November 2014.

LMS’ findings also show that the value of monthly gross remortgage lending fell to £4.6 billion in November, down 17% from October’s CML figure of £5.5 billion.

However, this is up by more than a quarter year-on-year, from just £3.6 billion.

The average mortgage rate fell to a new record low of 2.52% in October, down from 3.18% last year.

Andy Knee, Chief Executive of LMS said: “After a strong autumn, it’s disappointing to see remortgaging activity decline slightly in the run up to Christmas, a time when many could really use the savings gained from switching to a better rate.

“Historically low interest rates and a range of new mortgage products mean the industry can be optimistic for the year ahead.

“We hope this environment will generate more consistency in lending levels, something 2015 was unable to maintain.”