25% of homeowners remortgaging an existing property in January increased the size of their loan to free up capital to pay off other debts or spend elsewhere, according to research from LMS.

The property services company surveyed those opting to remortgage at the start of the year and found that of those increasing their loan amount, 66% did so by as much as £10,000.

Releasing equity in their home meant that 57% were able to fund a home improvement, while 37% said they would use the extra capital to consolidate their debts.

4% of homeowners also said they planned to use the money to grow their property portfolio and 3% to help their children onto the property ladder.

Meanwhile, 63% were motivated by the potential cash savings on offer by remortgaging. Of these, 56% have achieved a monthly saving of up to £500 and 6% more than £500.

“Remortgaging homeowners are benefitting from some excellent rates from lenders with many eager to snap up a good deal, be it to reduce the monthly mortgage burden or free up capital to spend elsewhere,” said Andy Knee, chief executive of LMS.

“The Funding for Lending Scheme will help to increase competition in the remortgage market over the next few months and we expect to see many more homeowners seizing the opportunity to make, what is in many cases, a substantial monetary saving.”