Remortgaging demand may not be as strong as would be expected considering the low interest rates available and possible rate increases this year, but those that are getting them are finding they can benefit the household budget. First of all, take into consideration that lenders are offering some of the cheapest interest rates seen in years on remortgages. Second, consider that gaining a fixed low rate remortgage would likely lower repayments for years and save money. Third, with equity level boosts from the past year, cash release with a remortgage could cut down on the size of debt a household is facing.

Remortgaging has many advantages right now, and those advantages mentioned above will probably not be in place further into the year. Lenders will begin to pull their lowest interest rates off the market once demand picks up. More increases in the swap rates, the interest rates lenders charge one another for borrowing, will have lenders putting rising costs onto the consumer with higher interest rate offerings.

According to data from LMS, December saw a large number of homeowners seeking a cash release with their property equity. In fact, it set a record for the amount of equity withdrawn with a remortgage deal. Almost one in ten (9%) homeowners stated they did so to pay down debt while 19% funded home improvements. Many were looking for savings with a lower interest rate as nearly two-fifths (37%) were able to find a monthly savings of up to £500 with a remortgage. Some, 3%, were able to save more than £500 per month with a new deal.

To find the best deal it may mean one must put aside loyalty as 77% in December switched lenders for their remortgage.

Those that noted they had consulted with an independent broker or remortgage adviser for help amounted to 37%.

Andy Knee, Chief Executive of LMS, said, “With a plethora of competitive rates currently on offer, savvy borrowers can snap up a good deal to boost monthly finances at a time when many households feel strapped for cash – especially after what for many will have been a Christmas splurge.

“Borrowers should not be complacent, however, as competitive rates will not be around forever, and with a cooling in the wider mortgage market now may be the best opportunity to shop around for offers and provide an injection of cash to your monthly budget.”