A quarter of homeowners remortgaging an existing property in January increased the size of their loan to free up capital to pay off other debts or spend elsewhere, according to research from LMS.
The property services company surveyed those opting to remortgage at the start of the year and found that of those increasing their loan amount two thirds (66 per cent) did so by as much as £10,000. Releasing equity in their home meant that 57 per cent were able to fund a home improvement, while 37 per cent 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 grow their property portfolio (4 per cent) and help their children onto the property ladder (3 per cent).
At the other end of the spectrum nearly two thirds (63 per cent) were motivated by the potential cash savings on offer by remortgaging. Of these, one in two (56 per cent) have achieved a monthly saving of up to £500 and one in twenty (6 per cent) more than £500.
Andy Knee, Chief Executive of LMS, comments: “Remortgaging homeowners are benefitting from some excellent rates from lenders with many eager to snap up a good deal, be it to reduce the monthly mortgage burden or free up capital to spend elsewhere. The Funding for Lending Scheme will help to increase competition in the remortgage market over the next few months and we expect to see many more homeowners seizing the opportunity to make, what is in many cases, a substantial monetary saving.”
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