Prudent home owners shaved a record £15.4 billion off their mortgage debt in the second quarter of this year as ultra low interest rates helped them pay down what they owe.
The figure marks the highest quarterly net injection of housing equity recorded in the Bank of England’s series, which goes back to 1970, as well as the 21st consecutive quarterly net injection of cash as the flow of mortgage lending remains weaker than the amounts of money being ploughed back.
Rock bottom mortgage rates and poor returns on savings have made it more attractive for people to use any spare cash they have to pay down their mortgage debts. The figure show the total net injection of mortgage repayments since summer 2008 has topped £209 billion. The latest quarterly total follows a net housing equity injection of £13.4 billion in the first quarter of this year. Separate figures recently released by the Bank show the typical interest rate taken out by borrowers on a new mortgage dropped in the second quarter to a new low of 3.47%. The Bank of England base rate has been held at a historic 0.5% low for more than four years.