If you bought your home between 2006 and 2008 you may well have sufficient equity in your property to remortgage, according to HSBC, one of the UK’s biggest lenders.
Interest rates are still low and hundreds of freelancers might now be in a position to take advantage of these if they switch to a new contractor mortgage.
HSBC conducted a study and discovered that somebody who purchased a house in April 2007 increased their equity from 6pc to 16pc in the year up to April 2010.
The bank’s head of mortgages, Martijn van der Heijden, pointed out that the rebound in house prices has been very important in helping home owners rebuild their equity, thus enabling them to access lower interest rates if they want to remortgage.
Increased equity leads to a reduced “loan to value” which in turn means borrowers qualify for more competitive interest rates.
Negative equity was a problem for home owners wanting to remortgage last year, so the increases over the past year must come as welcome news to borrowers.
The chief executive of Assetz, Stuart Law, says there are some good remortgage deals available at the moment but these are more geared towards homes than buy-to-let properties. He believes that we are set to see an increasing number of property owners remortgaging over the next few months.
On the other hand, the Fair Investment Company, a leading provider of online financial services, thinks that now is a good time for home buyers to offset their savings against their mortgage. With interest rates so low, savers aren’t earning a lot of interest and it therefore makes more sense to either make monthly overpayments or make a one-off lump sum payment to reduce the overall mortgage debt.
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