Over half of remortgagors lowered mortgage rates in May as EU referendum looms

 
Helen Cahill
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Borrowers would rather spend the cash on home improvements (Source: Getty)

More than half of people remortaging in May chose to lower their mortgage rate, as remortgagors braced themselves for a possible Brexit.

A third of borrowers reduced their monthly spend by up to £500, and over a quarter (26 per cent) increased the size of their loan, according to research from Legal Marketing Services (LMS).

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Families are prioritising long-term investments as the economic uncertainty of a possible Brexit looms. One in five (19 per cent) of those remortgaging spent the cash on improving their homes, three per cent spent the money on helping their children get onto the property ladder, and seven per cent paid off their debts.

Despite homeowners' worries about Britain's future, the housing market is still performing well - it emerged today that the time it takes to sell a house has hit a record low of 57 days on average.

Andy Knee, chief executive of LMS, said: "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.

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"We’re also seeing evidence in the market that many remortgagors are opting for a fixed rate to guarantee a set rate for a set period. 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.

"With an uncertain economic climate, knowing what your mortgage payment will be for five years is a very seductive offering for many remortgagors."

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