Homeowners are using an average of 3.8 per cent of post-tax income to clear their mortgage, according to the Bank of England TOBY MELVILLE/REUTERSHouseholds are paying off their mortgages at a record pace, cutting debt by a near record high of £12.6 billion in the second quarter. Since the financial crisis, mortgage holders have been paying down their debt in a reversal of the trend running up to the crash, when households used their home’s rising value to withdraw equity to buy new cars and holidays. By 2006 equity withdrawal accounted for 4.7 per cent of spending. Since 2008 homeowners have taken to paying off their debt or spending on their home. This is called “net housing equity injection”.

Source: The Times October 06, 2016 23:02 UTC