Lower interest rates stimulated homeowners to remortgage in July

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A survey by the conveyancing firm LMS found that 63% of people remortgaging their homes in July switched to a mortgage with a lower interest rate than their existing mortgage.

As reported by PropertyWire.com in August 2016, the survey also found that 43% of people remortgaging did so in order to reduce their monthly repayments.

In July, 35% of people remortgaging reduced mortgage repayments by at least £200. This compares with 28% of June remortgagers who saved over £200 a month.

LMS found that 21% of July remortgages were for home improvements compared to 19% in June. The percentage of people remortgaging to pay off debts rose from 7% in June to 9% in July.

The LMS survey demonstrates that, despite financial uncertainty following the Brexit vote, consumers have confidence in the remortgage market. The July figures show that people were not waiting for the anticipated Bank of England interest rate cut before deciding to remortgage. The Bank of England cut its base rate to 0.25% in August, but this does not necessarily mean that mortgage lenders will cut their rates further.

Andy Knee, the chief executive of LMS said:

“Despite uncertainty in the immediate aftermath of the referendum, the property market very much remains open for business. The shabby savings rates on offer mean that, when it comes to raising money for home improvements or clearing other debts, many people will naturally consider the wealth they have gained as a result of sustained house price rises.”

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