Almost two-thirds of remortgage customers in January switched deals to take advantage of the new lower mortgage rates that are currently on offer, according to research from LMS.
The company surveyed customers opting to remortgage at the start of the year and found that almost one in five (19%) homeowners increased the size of their loan by more than £10,000 to free up capital to pay off other debts or spend elsewhere.
Releasing equity in their home meant that 19% were able to fund home improvements, while over one in ten said they would use the extra capital to consolidate their debts. This is 2% more than the number who did this in December, highlighting that families are still feeling the pinch post-Christmas. A small number of homeowners also said they planned to use the money to help their children onto the property ladder.
Four in ten customers were motivated to remortgage by the potential cash savings on offer and the opportunity to reduce their monthly mortgage repayment..
More than eighty per cent of borrowers switched lenders, while just 2% were incentivised by their existing lender to stay with them, a sign that lenders could be doing more to keep current customers.
Almost half of customers consulted with an independent mortgage adviser or broker – a marked improvement since December when only 37% did this – to highlight the value that advisers and brokers have in sourcing the best rates available to customers.
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