The average remortgage is now £122,5411.
The increase reflects past rises in house prices as people now look to re-fix after their initial introductory rate mortgage ends; but it is also a sign that many may be using equity in their house to deal with other debts.
Robin Amlôt, senior editor of Moneyextra.com, said, “Recent reports from the retail sector, including disappointing sales growth figures from both Tesco and Sainsbury, would suggest that we’re not spending this money on goods and services but using it to reduce other debts.
“It seems many people are opting to switch expensive credit card debt and overdrafts into long term low interest rate mortgage debt. Of course, this does mean they could be paying far more interest in the long run but it is one way of reducing immediate monthly outgoings.”
In the broader housing market, pressure is still focused on first-time buyers. The average value of property being sought by first-time buyers rose by 8.91% to £183,317 while the average first-time buyer mortgage rose by just 2.99% to £139,935.
Over the same period, overall average property prices rose by 6.05% with the average house price at £228,754 and the average mortgage rose to £139,095, up just 2.95%.
The average value of mortgages actually completed by AWD Moneyextra customers in May jumped up £18,884.08 to £166,732.43, its highest level ever. The most popular mortgage lender in May was Abbey.
