24pc increase size of mortgage to ease living costs

Just shy of two-thirds (64%) did so to take advantage of the new lower mortgage rates that are currently on offer.

LMS surveyed customers opting to remortgage at the end of the year and found that of those increasing their loan amount almost one in six (17%) did so by as much as £10,000.

The latest remortgage report from LMS also found that the average amount of equity withdrawn from remortgaging hit a record high in December, showing that many families felt the pinch over the festive period.

Releasing equity in their home meant that 19% were able to fund home improvements, while almost one in ten (9%) said they would use the extra capital to consolidate their debts.

A small number of homeowners also said they planned to use the money to help their children onto the property ladder (1%).

At the other end of the spectrum many customers were motivated by the potential cash savings on offer by remortgaging.

Nearly two-fifths (37%) who remortgaged were able to make a monthly saving of up to £500 and 3% were able to save more than £500.

More than three-quarters (77%) took advantage of the opportunity to switch lenders, while just 4% were incentivised by their existing lender to stay with them.

Over a quarter of customers (26%) believe interest rates are going up, which may explain why they chose to remortgage at this time.

Over a third (37%) consulted with an independent mortgage adviser or broker, showing the value this offers in helping find the most competitive rate available.

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.”