Remortgage applications hit a three year high

Remortgage applications rose sharply in June to their highest level since 2008 as more and more homeowners took advantage of record low interest rates.  In addition, the number of home loans for house purchase also rose in June, providing some much needed good news for the housing and mortgage markets.

Homeowners taking advantage of record low remortgage deals

The research from Mortgage Advice Bureau and Coreco Group found that remortgage applications increased by 28 per cent in June compared to May and almost two thirds (65 per cent) compared to the same month a year ago.  The National Mortgage Index found that the number of remortgage applications reaches its highest level last month since September 2008.

Consumers are also increasingly attracted by record low fixed rate remortgage deals.  64 per cent of remortgages in June were on fixed rate products while the average loan size for remortgage applications increased by 8.6 per cent to £150,740.

House purchase mortgages up 31 per cent on June 2010

The research also found that mortgage applications for house purchases rose by 18 per cent in June compared to May and were up by 31 per cent on the same month last year.

The average loan to value (LTV) on mortgage applications rose slightly from 70.4 per cent in May to 71.3 per cent in June, possibly thanks to an increased number of mortgage deals at higher loan to values being made available by lenders.  The average deposit put down by a mortgage applicant in June was £55,937 compared to £55,259 in May.

Brian Murphy, head of lending at Mortgage Advice Bureau, said: “Mortgage activity in June continued its positive rebound, with applications up significantly for the second month running, following a sluggish April.

“In particular, remortgage activity was comparatively strong with borrowers taking advantage of all time low fixed rates.”

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