Conveyancing services provider LMS has released their monthly snapshot of remortages across the UK, showing that there was an average increase in monthly payments for those who remortgaged in July of £367.03 and 45% of borrowers increased their loan size in July.
The figures also show that 44% of those who remortgaged took out a 5-year fixed rate product, the most popular product last
month. 26% said their main aim when remortgaging was to release equity in their property.
Remortgage loan sizes
Change in loan size reported by borrowers
– 45% increased their total loan size
– 35% saw no change in their total loan size
– 19% reduced their total loan size
Average loan increase post remortgage: £20,243
Average loan decrease post remortgage: £15,561
Monthly loan repayments
Change in monthly loan repayments reported by borrowers
– 68% increased their monthly remortgage repayments
– 11% saw no change in their monthly remortgage repayments
– 21% reduced their monthly remortgage payments
– Average monthly repayment increase: £367.03
– Average monthly repayment decrease: £304.20
Regional trends
The average remortgage loan amount in London was £368,047, while the average for the rest of the UK stood at £172,268 making remortgage loan amounts 114% higher in London than in the rest of the country.
The longest previous mortgage length was found in Wales at 72.69 months (6.06 years), while the shortest was in the South East at 65.02 months (5.42 years), making the longest previous mortgage term 12% longer than the shortest.
Q4 is always a busy time for product expiries, and this year is no different. The recent reductions in mortgage rates from a number of large lenders bode well for customers coming to the end of a fixed rate. But let’s remember that many of these customers were on historically low rates, so they are in
for a bit of a shock – hopefully, the recent reductions soften the blow.
Looking further ahead, I feel we are on the cusp of some meaningful activity. We expect a 15-20% increase in product changes next year, and with the automation and improvements in remortgage conveyancing, we may see a move away from product transfers and a shift to full remortgage switching.
Borrower expectations for interest rate increases
– 40% within the next year
– 13% more than a year away
– 47% no expectation for a rate increase
Product Purchasing
– 43% 2-year fixed
– 7% 3-year fixed
– 44% 5-year fixed
– 2% 10-year fixed
– 2% Tracker
– 2% Other
Fixed-rate purchase motivations
– 74% I wanted the security of knowing how much I’ll be paying each month
– 10% I am worried about the economic climate and wanted to lock in a fixed rate
– 12% my broker recommended this
Primary goal when remortgaging
– 24% lower monthly payments
– 25% release equity on property/borrow more money
– 21% security over monthly payments/lock in a good deal now
Methodology
LMS’ UK remortgage lending estimates are forecasts based on our up-to-date internal conveyancing data covering thousands of remortgage completion transactions.
Established for over 30 years, LMS is one of the UK’s leading providers of conveyancing services. We offer a range of solutions for the entire conveyancing market, enabling a slick, secure, and seamless journey for all parties. CEO, Nick Chadbourne, shares his thoughts on the figures, stating:
“I feel we are on the cusp of some meaningful activity. We expect a 15-20% increase in product changes next year, and with the automation and improvements in remortgage conveyancing, we may see a move away from product transfers and a shift to full remortgage switching.”
This article was published by LMS as part of their advertising agreement with Today’s Conveyancer.
The views expressed in this article are those of the submitter and not those of Today’s Conveyancer.
