The March remortgage snapshot from national conveyancers LMS reveals ‘the lowest swap rates in recent years’, giving lenders ‘the confidence to price competitively’.
The report from the national conveyancing company found that new instructions increased by 23% in March compared to the previous month, with a 10% pipeline increase. Remortgages were down 20% on February and the overall cancellation rate increased by 1%.
‘The foundations for a positive year are set’, said LMS CEO Nick Chadbourne.
For the 47% of borrowers who increased their total loan size in March, the average loan increase was £20,224, with an average monthly payment increase of £315.67. For the 20% who decreased their mortgage size, the average loan reduction was £13,715, with an average monthly payment decrease of £301.50.
Almost half of those who remortgaged – 46% – took out a five-year fixed rate product, the most popular product last month. Two-year fixed deals were just slightly behind, at 41%. Knowing how much the monthly repayments would be was the major motivation for taking out a fixed deal (75% of borrowers), with 12% worried about the economic climate and 10% acting on broker recommendations.
Over half of borrowers reported an increase in their monthly remortgage payments in March (58%), with 28% seeing a reduction and 14% reporting no change.
The primary goal of borrowers when borrowing was to release equity, with 30% of remortgages wanting to borrow more money. Lower monthly payments were cited as the reason for remortgaging by 26%, with 16% wanting to lock in a good deal or increase security of the monthly repayments.
Commenting on the figures, Chadbourne said:
“March’s figures show an expected seasonal change in cancellations and completions, and pipelines are projected to increase throughout the next quarter as we approach the first major product expiry spike of the year in June. The lowest swap rates we’ve seen in recent years have given lenders the confidence to competitively price their offerings, which is a positive sign for the remortgage market.”
When it comes to borrower expectations for interest rate increases, 50% expect to see an increase within the next year, 21% believe it will be more than a year away, and 29% don’t think there will be a rate increase.
Chadbourne added:
“Overall, Q1 had a strong finish with instructions and pipelines up; we expect more of the same throughout the year with completions following as pipelines mature. Economic shockwaves are the biggest threat with Trumponomics in full flow; however, the foundations are strong and it will take a lot to blow this year off course.”
Regionally, the average remortgage loan amount in London was £319,045, while the average for the rest of the UK stood at £161,298 – making remortgage loan amounts 98% higher in London than in the rest of the country. Average remortgage amount for the whole of the UK was £192,809, down 2% on February.
The longest previous mortgage length was found in the North East at 82.86 months (6.91 years), with the shortest in Yorkshire at 69.95 months (5.83 years). The average for the UK was 76.76 years, up 3% since last year.
Average length of previous mortgage
| Region | Months | Percentage change from February |
| Total | 76.76 | 3% |
| East Anglia | 77.03 | 4% |
| East Midlands | 78.18 | 10% |
| London | 82.15 | 6% |
| North East | 82.86 | 8% |
| North West | 76.87 | -1% |
| South East | 75.95 | 3% |
| South West | 73.22 | 0% |
| Wales | 81.79 | 8% |
| West Midlands | 77.41 | 8% |
| Yorkshire | 69.95 | -7% |
Average remortgage amount
| Region | Average Remortgage Amount | Percentage change from February |
| Total (all regions) | £192,809 | -2% |
| East Anglia | £219,913 | -4% |
| East Midlands | £155,381 | -2% |
| London | £319,045 | -3% |
| North East | £124,578 | -5% |
| North West | £146,911 | -1% |
| Northern Ireland | £105,555 | -19% |
| Scotland | £138,712 | -5% |
| South East | £254,874 | 2% |
| South West | £183,962 | 4% |
| Wales | £141,359 | 0% |
| West Midlands | £150,976 | -5% |
| Yorkshire | £152,052 | 5% |
LMS’ UK remortgage lending estimates are forecasts based on up-to-date internal conveyancing data covering thousands of remortgage completion transactions.
