LMS has prepared its monthly remortgage snapshot for August. The Snapshot collates LMS data to provide a comprehensive overview of the re-mortgage activity across the month.
Key stats:
- Instructions decreased by 2% in August
- 14% less remortgages were completed in August
- The overall cancellation rate increased 3%
- Pipeline cases increased by 1% month-on-month
Fast facts
- £329.81 average monthly payment increase for those who remortgaged in August
- 50% of borrowers increased their loan size in August
- 45% of those who remortgaged took out a 5-year fixed rate product, the most popular product last
month - 27% said their main aim when remortgaging was to release equity in their property
Remortgage loan sizes
Change in loan size reported by borrowers
– 50% increased their total loan size
– 29% saw no change in their total loan size
– 21% reduced their total loan size
Average loan increase post remortgage: £19,913
Average loan decrease post remortgage: £13,594
Monthly loan repayments
Change in monthly loan repayments reported by borrowers
– 67% increased their monthly remortgage repayments
– 8% saw no change in their monthly remortgage repayments
– 25% reduced their monthly remortgage payments
– Average monthly repayment increase: £329.81
– Average monthly repayment decrease: £384.79
Regional trends
The average remortgage loan amount in London was £384,538, while the average for the rest of the
UK stood at £184,251 making remortgage loan amounts 109 % higher in London than in the rest of
the country.
The longest previous mortgage length was found in the South West at 77.73 months (6.48 years),
while the shortest was in East Anglia at 65.87 months (5.49 years), making the longest previous
mortgage term 18% longer than the shortest.
Average remortgage amount: £207,455
Average length of previous mortgages (months): 69.76
Security over monthly repayments remains a high desire for customers.
August trends follow months with higher monthly outgoings and a spread between mortgage terms. What remains a constant is the desire for customers to have security over their monthly outgoings. As we’re nearing Autumn, I was triggered to look at the same point in 2022, just before Liz Truss introduced the mini-budget. At that time, almost 70% of homeowners were taking 5-year products, and loan sizes were increasing by around half of what we see today. Given that millions of borrowers remain at the low rates from pre-2022, many are still to be hit by the rate shock of remortgaging.
Borrower expectations for interest rate increases
– 35% within the next year
– 20% more than a year away
– 45% no expectation for a rate increase
Product Purchasing
– 41% 2-year fixed
– 6% 3-year fixed
– 45% 5-year fixed
– 1% 10-year fixed
– 4% Tracker
– 3% Other
Fixed-rate purchase motivations
– 74% I wanted the security of knowing how much I’ll be paying each month
– 13% I am worried about the economic climate and wanted to lock in a fixed rate
– 9% My broker recommended this
Primary goal when remortgaging
– 27% lower monthly payments
– 27% release equity on property/borrow more money
– 16% security over monthly payments/lock in a good deal now
CEO, Nick Chadbourne, said:
“As we’re nearing Autumn, I was triggered to look at the same point in 2022, just before Liz Truss introduced the mini-budget. At that time, almost 70% of homeowners were taking 5-year products, and loan sizes were increasing by around half of what we see today.”
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.
This article was submitted to be 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.
