One in ten homeowners remortgaged their property as a way of relieving financial anxieties caused by the impact of Covid-19, research has found.
The survey by NatWest looking at how people who have remortgaged in the last two years felt about this financial decision revealed many had found it improved the mental health in general.
In fact, the study found just under three quarters (74%) felt remortgaging had a positive impact on their lives.
This sentiment increased slightly amongst the 18 to 30s age group in which 77% listed mental health as the primary or secondary reason for their decision to remortgage, with just 23% saying the step was purely financial.
One survey participant explained: “It meant I had the reassurance of knowing what my monthly payments would be which made me feel much more relaxed.”
Better rates
In the same way consumers are advised to shop around for a cheaper car insurance policy or energy tariff when their current deal expires, financial experts advise homeowners to remortgage when they reach the end of their mortgage deal.
This is because mortgage borrowers automatically default to their current lender’s standard variable rate (SVR) if they don’t find a new deal.
The SVR is usually much more expensive, with data published at the end of July by Moneyfacts revealing some borrowers could be paying rates of 2.5% or more if they didn’t switch.
In fact, NatWest’s research found 43% of its respondents had decided to remortgage to reduce their monthly repayments.
But others (19%), the study discovered, had decided to remortgage to free up some money to make home improvements.
Going forward, renovating or improving homes looks set to be an even bigger influence on the decision to remortgage. Indeed, NatWest discovered 62% of homeowners would consider remortgaging a second time to fund home improvements rather than risk a move in uncertain times.
