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Remortgagors release cash for Christmas

by: Mortgage Solutions
  • 17/12/2015
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Remortgagors release cash for Christmas
Almost a third (31%) of borrowers who remortgaged in November did so to increase the size of their loan, and release some cash before Christmas, according to LMS.

Of these switchers, two-thirds (66%) increased their loan amount by more than £10,000.

Home improvements were the main resons for accessing equity, according to the research. Of the 31% who remortgaged to increase the size of their loan, three in five did so to fund home improvements (60%). In contrast, just 17% are using the extra cash to pay off other debts.

There was also an increase in customers remortgaging in order to access lower interest rates, rising to 63% of remortgagors, up from 61% during the previous month.

A third of those who remortgaged managed to reduce their monthly payments by up to £500, also freeing up extra cash by limiting outgoings, broadly the same as last month (34%).

Andy Knee, chief executive of LMS, said: “Savvy borrowers are using remortgaging to their advantage, locking in to low rates ahead of the festive period and in many cases accessing cash to make home improvements. For some, the additional funds will provide a much-needed cash injection in the run up to Christmas as families feel under rising pressure to spend huge sums of money. However, the market remains a long way short of the pre-recession years and greater customer appetite could see activity levels increase throughout 2016.

“The setting is certainly ripe for remortgaging and record low rates, lender appetite and rising house prices present more affordable options. We therefore suggest families consider all their options ahead of evaluating their finances as part of their financial planning.”

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