Mortgages being repaid in record time


According to the Bank of England, households in the UK are paying their mortgages off at a record pace, leading to a £13bn debt reduction for the first quarter of the year.
This is surprising to economists who did not expect an increase in the speed of repayments. The repayment figure (£13bn) is higher than ever before, with the same quarter last year seeing a repayment figure of £11.1bn.
“There is a compelling case for many people to be looking to take advantage of very low mortgage rates to reduce their outstanding mortgage balances to improve their personal balance sheets – if they can afford to do so,” said Howard Archer, of IHS Insight.
“Extremely low savings interest rates have undeniably made it much more attractive for many people to use any spare funds that they have to reduce their mortgage balances rather than put the money into savings accounts.”
Despite the record high, the Bank of England is warning that the figures do not necessarily indicate that homeowners are actively repaying their debts quickly. They highlighted a decrease in house sales, which is linked to a decrease in equity withdrawal.

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