"The outlook remains bright for remortgaging but there has been a slight shift in the attitudes of why people are doing so."
The number of people opting to remortgage in order to increase the size of their loan (so as to release equity) fell by 4 percentage points, from 28% in March to 24% in April, according to research from LMS.
Those increasing the size of their loan by more than £10,000 has also decreased: a fall of six percentage points to 16% in April.
In contrast, there has been a spike in the number of homeowners who remortgaged to reduce their monthly payments. Almost two-fifths of remortgagors cut their monthly payment by up to £500, 7% more than the number who did so in March.
Around 3% who remortgaged did so to reduce their monthly payments by more than £500.
Remortgagors are also capitalising on the competitive rates currently available. The percentage remortgaging in order to take advantage of a lower mortgage rate rose to 63% in April after staying steady at 57% throughout the months of February and March.
Andy Knee, Chief Executive said: “The outlook remains bright for remortgaging but there has been a slight shift in the attitudes of why people are doing so. Remortgagors in April were more interested in getting the most cost-effective deal to reduce their monthly payments and boost their spending power elsewhere, rather than using it as a tool for debt reduction or increasing the size of their loan: an indication household finances are more robust and a ray of hope in the face of predicted economic slowdown as the country nears the EU referendum.
“Following the vote, the Bank of England is likely to keep rates on hold – or even lower them – but speculation that a potential Brexit would cause mortgage costs to rise, should encourage prudent homeowners to cement their finances against uncertainty and reap the benefits by locking in to a low mortgage rate.”
