LMS has prepared its monthly remortgage snapshot for September. The Snapshot collates LMS data to provide a comprehensive overview of the re-mortgage activity across the month.
Key stats:
- Instructions increased by 24% in September
- 5% less remortgages were completed in September
- The overall cancellation rate increased 12%
- Pipeline cases increased by 2% month-on-month
Fast facts:
- £370.13 average monthly payment increase for those who remortgaged in September
- 49% of borrowers increased their loan size in September
- 44% of those who remortgaged took out a 2-year fixed rate product, the most popular product last
month - 31% said their main aim when remortgaging was to release equity in their property
Remortgage loan sizes
Change in loan size reported by borrowers
– 49% increased their total loan size
– 32% saw no change in their total loan size
– 19% reduced their total loan size
Average loan increase post remortgage: £20,827
Average loan decrease post remortgage: £14,682
Monthly loan repayments
Change in monthly loan repayments reported by borrowers
– 70% increased their monthly remortgage repayments
– 8% saw no change in their monthly remortgage repayments
– 22% reduced their monthly remortgage payments
– Average monthly repayment increase: £370.13
– Average monthly repayment decrease: £318.98
Regional trends
The average remortgage loan amount in London was £366,746, while the average for the rest of the UK stood at £172,194 making remortgage loan amounts 112% higher in London than in the rest of the country.
The longest previous mortgage length was found in Yorkshire at 78.23 months (6.52 years), while the shortest was in East Anglia at 66.62 months (5.55 years), making the longest previous mortgage term 17% longer than the shortest.
Average remortgage amount: £207,584
Average length of previous mortgages (months): 71.07
Typical seasonal remortgage activity kicks in.
As the summer ended, we were waiting to see if the usual seasonal remortgage uplift would kick in, and it has. Over 33% of all product expiries in 2024 will happen in Q4; therefore, it’s no surprise to see the increase in instructions. Specifically, the end of December consists of the highest number of product expiries for a single month across the whole of 2024.
Even though rates are forecasted to drop in 2025, we are still seeing a large number of customers choosing to fix over the longer term. 2-year fixed rates are the most popular at 44%, closely followed by 5-year rates at 42%, emphasising customers’ desire to lock in certainty over the long term. Borrower expectations for interest rate increases
– 38% within the next year
– 18% more than a year away
– 44% no expectation for a rate increase
Product Purchasing
– 44% 2-year fixed
– 6% 3-year fixed
– 42% 5-year fixed
– 2% 10-year fixed
– 3% Tracker
– 3% Other
Fixed-rate purchase motivations
– 76% 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
– 10% My broker recommended this
Primary goal when remortgaging
– 26% lower monthly payments
– 31% release equity on property/borrow more money
– 16% 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
Our CEO, Nick Chadbourne, shares his thoughts on the figures, stating:
“Even though rates are forecasted to drop in 2025, we are still seeing a large number of customers choosing to fix over the longer term. 2-year fixed rates are the most popular at 44%, closely followed by 5-year rates at 42%, emphasising customers’ desire to lock in certainty over the long term”.
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.
