Mortgage equity ‘on the rise’

An increasing number of Britons are looking to home equity as a means of getting extra credit, new figures reveal.

According to a study by the Bank of England, some £14.6 billion was released during the last quarter of 2006, compared to £12.2 billion in the three-month period between July and September.

Vicky Redwood UK economist for Capital Economics said: "The figures suggest that in the short-term, the recent strength in the housing market will support consumer spending.

"Despite higher interest rates, households are still keen to unlock money tied up in their house into a more spendable form."

Overall mortgage equity withdrawal totaled £49.7 billion over the course of last year, in comparison to £36.6 billion the previous year.

Increasing house prices was attributed to the rising number of Britons looking to refinance their home loans to free up funds for other spending.

Last month, MoneyExpert chief executive Sean Gardener claimed that choosing an interest-only mortgage could reduce borrowers’ monthly home loan repayments.

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