A new report by conveyancing organisation LMS has shown that in June 2016, a quarter of all mortgages were remortgages.
According to a June 2016 article on MoneyExpert.com, LMS said that low interest rates meant that a third of borrowers reduced their monthly payments by about £500 when they switched to lower interest rate mortgages.
Andy Kee, the chief executive of LMS, said:
“Increased competition between lenders, record low rates and rising housing equity have come together to provide homeowners with a setting that is ripe for remortgaging.
“It is clear that many savvy borrowers are taking advantage of the current climate and we expect activity to maintain its momentum.”
Though the total number of remortgages fell slightly in June, there was an increase in the amount of equity people were releasing in their homes. Though a majority of remortgages were used to reduce monthly payments, a fifth of remortgages were for home improvements and 9% were used to pay off debts.
The amount borrowed depended on the regional variation of property values, with London having the highest average remortgage loan of £197,907 and the North East having the lowest value at £105,461.
The Bank of England is not increasing the base interest rate, which, according to LMS, means that interest rates for remortgaging should not rise. Many borrowers are choosing a fixed rate for a set period to enable them to budget more accurately.
A residential or commercial mortgage broker can find the best remortgaging deals to either release equity or reduce monthly payments.