Analysis by HSBC indicates that in the current environment, the amount of equity you hold in your home is more important than ever, especially for homeowners wishing to remortgage.
Between September 2007 and April 2009, the high and low water marks for UK house prices according to land registry data, values of properties fell month on month, eroding deposits and equity held by Britons in their homes.
Even though lenders have always offered tiered mortgage rates to customers with differing levels of equity in their home, the recent environment of house price volatility and the associated risk of lending to high loan to value customers has created a widening gap between the rates on offer to homeowners with large and small deposits.
HSBC has looked at house purchases in April 2006, 2007 and 2008 and analysed what impact fluctuating house prices have had on the equity held by average purchasers in these months. In each of the years’ analysed a typical homeowner bought their property, they have significantly improved their options and chances to remortgage since April 2009.
In each case they will today be able to access a lower rate mortgage as they have broken through into a lower LTV bracket.
Martijn van der Heijden, head of mortgages for HSBC, 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