Homeowners rushing to pay off mortgages

In a bid to steady their finances, Britons have changed their attitudes to their mortgages.

Many are now worried, due to the fact that falling house prices and the end of cheap available credit, means that spending has been slashed.

Figures from the Bank of England revealed that most are now paying into their mortgage with an estimated £5.7 billion being paid in between July and September this year, rather than splashing out on new cars and holidays.

Equity withdrawals reached their highest back in 2003, when homeowners borrowing rose by £17.2 billion, taking advantage of the soaring property prices of the day.

This represents the largest quarterly injection since records began back in 1970 as the ten-year high on property prices has come to an end. Many see the debt of their mortgage as a primary burden and are keen to reduce it in times of recession.

Howard Archer, the chief UK and European economist at IHS Global Insight, has said that increasing housing equity is a sure way of reducing consumer spending as consolidation of finances is key.

Another option that has been widely used as people look to increase their incomes are survive the credit crunch, sees a return of the lodger as homeowners aim to utilise their spare rooms, according to EasyRoommate.com, the house and flat share website.

Story link: Homeowners rushing to pay off mortgages