Figures from LMS show that the average amount of equity withdrawn through remortgaging has almost doubled year-on-year as homeowners remortgage to help pay off debt or to generate extra funds.
According to the figures, the average amount of equity withdrawn by remortgaging customers stood at £26,862 in February. The figure is a 41% rise from January and 94% higher than February 2014 when the average amount was £13,833.
The total amount of equity withdrawal from remortgaging in February stood at £621m, an 80% increase from the previous year.
However, LMS figures also found that remortgaging fell in February with the value of remortgaging lending dropping by 16% to £3.5bn and the number of remortgage loans falling by 10% to 23,135. House price increases throughout 2014 saw the average LTV drop by 4%.
Andy Knee, chief executive of LMS, said: “Despite inflation reaching its lowest ever level falling to zero for the first time on record there has been a significant increase in the average amount of equity withdrawn through remortgaging. It is apparent, that despite the low inflation we’re experiencing, which should provide a boost to household spending power, many families continue to feel the pinch and remortgaging can provide a much needed source of income.
“House price growth witnessed throughout 2014 has meant that the increase in the amount of equity withdrawn through remortgaging has not increased the LTV ratio – some more good news for customers who could use the extra boost to their income but are cautious about increasing the size of their mortgage.”