New analysis from HSBC provides good news for those people who bought their homes between 2006 and 2008. It suggests that people in this position may be able to switch to cheaper loans as the equity in their property has risen during the past year.
The analysis finds that due to low interest rates and rising house prices, a person who bought their home in April 2006 has increased the amount of equity from 17% last year to 25%. The increase means that homeowners can now apply for mortgages with a lower loan-to-value thereby cutting the cost of their monthly repayments.
The HSBC figures are based on 25-year repayment mortgages and house prices collected by the Land Registry. Head of mortgages at HSBC, Martijn van der Heijden said: “This analysis just shows how important the rebound in house prices have been for existing homeowners. Whether they have any intention to sell or not, rebuilding the equity in their homes is an essential element in gaining access to lower rates when they come to remortgage.”
https://www.theguardian.com/money/2010/may/25/homeowners-remortgage-equity-rebound
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