Many homeowners use their increased property value as a source of additional income.
Almost a quarter (24 per cent) of homeowners changed the size of their mortgage by more than £1,000 because they needed money to pay down debts or for other expense, new research from LMS reveals.
The property services outsourcing company, surveyed customers opting to remortgage in December last year and found that of those increasing the amount of their loan, 17 per cent did so by as much as £10,000.
Another reason for remortgaging was the possibility of cash savings, with 37 per cent of people adding up to £500 to their savings pots via a new remortgage deal. As much as 3 per cent managed to increase their savings by more than £500.
Many people (64 per cent) chose to remortgage to take advantage of new competitive offers with lower interest rates.
The proportion of people who used the opportunity to switch lenders was even higher (77 per cent).
More than a third (37 per cent) of the homeowners looking to remortgage consulted an independent adviser to find the best offer on the market before they switch their loans.
More than a quarter (26 per cent) of survey respondents expect interest rates to grow in the near future, which is one explanation why so many people are considering remortgaging at this point.
“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,” Andy Knee, Chief Executive of LMS, said.
Other things people used the extra cash from remortgaging include: funding home improvements (19 per cent), consolidating debts (9 per cent), helping their children get on the property ladder (1 per cent).
