Four in five (81 per cent) of homeowners who were remortgaging in January chose to switch lenders, new research from LMS found.
Only 2 per cent of remortgage customers were persuaded to stay with their existing loan provider, which is a sign that lenders should put more effort into keeping their clients.
Almost half (46 per cent) of homeowners consulted an independent adviser or broker before remortgaging. Apparently more people need expert advice to get the best offer in the current low-rate environment. In December 2014, the proportion of customers who sought out the services of an adviser or broker was considerably lower, at 37 per cent.
The record low rates enticed almost two-thirds (62 per cent) of homeowners to remortgage in January and a good proportion of them (19 per cent) managed to extend the size of their loans by more than £10,000.
Apart from the low rates other reasons for remortgaging named by customers surveyed by LMS were:
*Potential cash savings (41 per cent)
*Home improvements (19 per cent)
*Consolidation of debt (11 per cent)
Commenting on the results of the study, LMS chief executive Andy Knee, said:
“Many customers are remortgaging to free up extra cash each month or increase the size of the loan to reduce the burden on their finances. Recent news that wages are finally set to see an increase in real terms will come as welcome news to all those feeling the pinch, and may offer some light relief in 2015.*
“Despite the lowest- ever interest rates available for remortgaging at present, lending levels remain lower than last year as homeowners fail to capitalise on these offers.Many have been spurred on by new year’s financial planning or a fear that interest rates will rise but more could be set to benefit by remortgaging.”
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