The latest remortgage snapshot from LMS shows a substantial rise in completions in July, which the national conveyancing service provider says signals a shift in borrower behaviour.
The number of completed deals has increased by 71% since June, with two-year terms edging ahead of five. Last month, 45% of borrowers opted for five-years, with 43% choosing two. The latest figures show 46% of people preferred the two-year term, with 41% locking in five-year deals.
The primary goal when remortgaging was to release equity on the property or borrow a larger sum, cited by 28% of remortgagers. A quarter (26%) wanted to lower monthly repayments, while 18% said they wanted security over monthly payments or to secure a good deal.
Loan size was increased by 43% of borrowers, by an average of £20,848. Just over a quarter (27%) decreased their loan, averaging a £12,739 reduction. More than half (56%) increased their monthly repayments, taking them to an average of £329.54, with 33% reducing their instalments by an average of £207.63.
‘Most borrowers have favoured short-term certainty, with two-year fixed-rate products becoming the most popular choice’, said LMS CEO Nick Chadbourne.
“While monthly repayments increased for many, the desire to manage costs and secure financial stability remained a key driver. Further spikes are likely to occur around quarter-end, which is when more fixed-rate products expire. Until then, I’m expecting activity to remain steady.”
When asked about the likelihood of interest rate increases, 44% said they expected a rise within the next year, 19% believed it would be more than a year away, and 37% said they don’t expect an increase.
After the steep rise in July completions, instructions fell by 4% with a 9% reduction in the pipeline.
