More than half of people remortgaging in May took advantage of competitive rates available to lower their mortgage rate, according to LMS.
A third of remortgagers were able to reduce their monthly outgoings by up to £500, while the number remortgaging to increase the size of their loan rose two percentage points from 24 to 26 per cent.
The LMS survey of 734 customers last month also found the number increasing their loan by more than £10,000 was also up in May to 19 per cent, rising three percentage points from a low of 16 per cent in April.
The number of remortgagers who believe interest rates will rise increased slightly from 12 per cent in April to 14 per cent in May, possibly propelled by uncertainty surrounding the EU referendum and speculation this could see mortgage rates rise.
Andy Knee, chief executive of LMS, suggested increased competition between lenders, record low rates and rising housing equity have all created favourable conditions for those looking to remortgage.
He pointed to the most recent Council of Mortgage Lenders’ figures, which had remortgage activity totalling £6bn, up by a quarter on March and 40 per cent compared to a year ago.
“The number remortgaging hit a seven-year high in April, and with over half of those lowering their mortgage rate and a quarter increasing the size of their loan in May, it is clear that many savvy borrowers are taking advantage of the current climate and we expect activity to maintain its momentum.
“For others, as the EU referendum looms ever closer with the outcome increasingly difficult to predict, homeowners are looking for stability in their monthly costs and prioritising long-term security over initial savings.”
LMS also found evidence that many remortgagers are opting for a fixed rates amid this uncertainty, with Mr Knee adding: “Locking in is very competitive right now with huge savings to be made in the long-run even if it means in the short term they pay a little more.”
peter.walker@ft.com
