Borrowers increasing mortgages to support other spending
25% of homeowners who remortgaged in January did so in order to free up capital to pay off other debts, according to research from LMS.
They found that 66% of those increasing their mortgage did so by up to £10,000. Homeowners had a variety of reasons for releasing equity, 57% to fund a home improvement, while 37% said they would use the capital to consolidate debts.
Many have managed to save cash by remortgaging with 56% saving up to £500 and 6% more than £500.
Andy Knee, Chief Executive of LMS, said: “Remortgaging homeowners are benefitting from some excellent rates from lenders with many eager to snap up a good deal, be it to reduce the monthly mortgage burden or free up capital to spend elsewhere.
“The Funding for Lending Scheme will help to increase competition in the remortgage market over the next few months and we expect to see many more homeowners seizing the opportunity to make, what is in many cases, a substantial monetary saving.”