A quarter of homeowners who remortgaged in January 2013 did so with the intention of using the money to clear debts or aid spending in other areas, according to a survey by the estate agents LMS.
Home improvements were the main area of expenditure, with 57% of homeowners using the money to fund this. A further 4% used it to increase their property portfolio. More than a third of people said they planned on using the additional monies to help consolidate their current debts; and 3% intend to give it to their children to help them gain a foothold on the property ladder.
This willingness to take out additional debt may be the result of the lenders war currently raging in the battlefield of interest rates. The result is record low rates on a variety of deals, which people appear to be happy to take up. Andy Knee, chief executive of LMS, said these new deals allow homeowners ‘to reduce the monthly mortgage burden or free capital to spend elsewhere.’
Moreover, if the rates continue to fall, he said they ‘expect to see many more homeowners seizing the opportunity to make, what is in many cases, a substantial monetary saving.’ For those looking to obtain the best remortgage deals, more than half could save up to £500 per month, and 6% could save over £500.