Borrowers remortgaging to pay off credit card debts
Figures from the British Bankers Association (BBA) have revealed that homeowners are increasingly remortgaging their property in order to pay off expensive credit card debts.
The figures show that mortgage lending grew in August, but net repayment of consumer credit also grew, indicating that homeowners are borrowing money to pay off more pressing debts.
Net mortgage lending grew by an underlying £6.2 billion during August, some £0.4 billion higher than the £5.8 billion increase in July. It was also significantly above the monthly average of £5.4 billion over the previous six months.
However, unsecured personal lending declined by an underlying 0.2 billion during the month of August, reducing the monthly average increase to £0.1 billion for the previous six months.
Overdrafts and loans, meanwhile, grew by 0.2 billion, while underlying credit card borrowing reduced by 0.4 billion.
David Dooks, BBA director of statistics, commented: "The draw-down of house purchase loans in particular has driven net mortgage lending higher of late and August's increase set a new monthly record.
"This buoyancy in mortgage lending is contrasted by the trend in consumer credit, where credit card lending has shown a further decline - the fourth month in a row - while lending on personal loans and overdrafts was weak."
© Adfero LtdYou can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.