Just 15% of customers remortgage to raise funds
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Just 15% of borrowers applying for remortgage deals sought to raise money in the past three months, shows data from Evaluate Technologies.
It says a combination of cautious borrowers unwilling to take on more debt and lenders clamping down on capital raising through remortgaging is hitting mortgage equity withdrawals.
Around 85% of all remortgage applications through the service between June and August were customers switching deals to better rates as lenders clamped down on borrowers using housing equity to raise cash, data shows.
Only 4% of borrowers were able to withdraw equity to help consolidate debts while 3.5% raised money for home improvements and another 2.5% raised capital. Another 4.3% raised money to buy another property while the rest raised cash for their business.
Julie Speed, national accounts director at Evaluate Technologies says: “Neither lenders nor borrowers are willing to take risks in the current market. Inevitably that means fewer applicants are even trying to withdraw equity.
“Just as the best new deals are reserved for those with 40% deposits the same applies to homeowners aiming to raise cash even if they have perfect payment records and substantial equity.
“It’s fair to say that some lenders were lax in the past by enabling people to treat their homes as cash machines and the current tight credit situation has changed that dramatically.”
