Remortgaging High Ahead Of Expected Rate Rise

Remortgaging hit its highest level for four years last month as borrowers looked to lock in to fixed rates which maintain or restore certainty to their mortgage bills.

It (Other OTC: ITGL - news) rose by nearly 29% in July, according to the British Bankers' Association (BBA).

New (KOSDAQ: 160550.KQ - news) mortgages for house purchases were 11% higher, taking the overall number of home loans approved up by 15%.

Richard Woolhouse, chief economist at the BBA, said: "This was a 29% surge on 12 months before and the highest figure we’ve seen for four years.

"Savvy homeowners are snapping up competitive deals before an expected increase in interest rates.

"There were concerns that new regulations had made applying for a mortgage more onerous.

"But remortgaging is still a straightforward process that can take even less time than Alastair Cook and his men took to beat Australia."

Gross mortgage borrowing in July was £11.8bn, 11.5% higher than in the same month last year.

A rate rise which was originally expected before the general election has been put back numerous times.

The current consensus among economists is for a rate rise to occur in early 2016.

Sky News' Economics Editor, Ed Conway, has warned the rates the high street banks offer may become less generous even before the official Bank of England rate is tightened.

This could go some way to explaining the strong demand in July, as savvy homeowners and buyers look to secure favourable fixed rate deals.

Separately, the BBA reported that credit card use by transaction volume had jumped 6% to 224 million transactions in July.

However, the overall value of these transactions was just 3% higher at £12.9bn - indicating that credit cards are being used more frequently and supporting theories that we are heading for a cashless society.