The average amount of remortgage loans per customer took a huge leap of 94 per cent year-on-year in February 2015 as consumers were seeking to fill the gaps in their household finances.
Compared to January, the average loan size per customer was 41 per cent higher at £26,862, according to the latest LMS Remortgage Report.
The total amount of equity withdrawn from remortgaging in February went up by 80 per cent annually to £621 million.
The size of the average remortgage loan has decreased slightly to £149,143, down by 2 per cent on January and by 4 per cent on February 2014.
The number of remortgage loans was lower than a month and a year ago. They fell by 10 per cent on the month to 23,135 and were down by 7 per cent from last February.
Analysing the figures, LMS chief executive Andy Knee, said:
“Despite inflation reaching its lowest-ever level – falling to zero for the first-time on record – there has been a significant increase in the average amount of equity withdrawn through remortgaging. It is apparent, that despite the low inflation we’re experiencing, which should provide a boost to household spending power, many families continue to feel the pinch and remortgaging can provide a much needed source of income.
“It is therefore important that low inflation does not affect the wage growth we’ve finally started to experience in recent months since affordability continues to remain key. As interest rates look set to remain at their record low for even longer it is important that borrowers do not become complacent about remortgaging since now is a prime time to make the most of the competitive rates on offer.
“House price growth witnessed throughout 2014 has meant that the increase in the amount of equity withdrawn through remortgaging has not increased the LTV ratio – some more good news for customers who could use the extra boost to their income but are cautious about increasing the size of their mortgage.”
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