More than half of people remortgaging in May took advantage of the competitive deals available to lower their mortgage rate, new research from LMS shows.

Some 56% of those who remortgaged last month reduced their monthly mortgage payments, with around a third reducing their monthly outgoings by up to £500.

The study also revealed that the number of people remortgaging to increase the size of their loan rose by 2% from 24% to 26%, while the volume increasing their loan by more than £10,000 also rose in May to 19%, up 3% from a low of 16% in April.

One in five (19%) borrowers used the cash released from remortgaging to spend on home improvements, while 3% borrowed to help their children up the property ladder and 7% opted to pay off other debts.

Andy Knee, Chief Executive of LMS, said: “Increased competition between lenders, record low rates and rising housing equity have come together to provide homeowners with a setting that is ripe for remortgaging. 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. 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.”