An additional two-thirds (64%) did so to take advantage of the new lower mortgage rates that are currently on offer.
LMS found that of those increasing their loan amount, almost one in six (17%) did so by as much as £10,000. The average amount of equity withdrawn from remortgaging also hit a record high in December, showing that many families felt the pinch over the festive period.
Releasing equity in their home meant that 19% were able to fund home improvements, while almost one in ten (9%) said they would use the extra capital to consolidate their debts. A small number of homeowners also said they planned to use the money to help their children onto the property ladder (1%).
At the other end of the spectrum many customers were motivated by the potential cash savings on offer by remortgaging. Nearly two-fifths (37%) who remortgaged were able to make a monthly saving of up to £500 and 3% were able to save more than £500.
More than three-quarters (77%) took advantage of the opportunity to switch lenders, while just 4% were incentivised by their existing lender to stay with them.
Over a quarter of customers (26%) believe interest rates are going up, which may explain why they chose to remortgage at this time. Over a third (37%) consulted with an independent mortgage adviser or broker, showing the value this offers in helping find the most competitive rate available.
Andy Knee, Chief Executive of LMS, comments:
“With a plethora of competitive rates currently on offer, savvy borrowers can snap up a good deal to boost monthly finances at a time when many households feel strapped for cash – especially after what for many will have been a Christmas splurge.
“Borrowers should not be complacent, however, as competitive rates will not be around forever, and with a cooling in the wider mortgage market now may be the best opportunity to shop around for offers and provide an injection of cash to your monthly budget.”
