The latest remortgage snapshot from LMS shows a relatively flat picture for June, but a 20% increase in year-on-year instructions ‘emphasises market strength’, the company says.
There was no change in the instruction rate or cancellation rate, and 16% fewer remortgages completed in June than the previous month. The pipeline has increased by 8% for the same period.
Five-year fixed-rate deals remained the most popular product, chosen by 45% of remortgagers. Two-year fixed terms were chosen by 43% of borrowers, with only 1% opting for a 10-year term.
The majority of those chosing fixed rates said they wanted the security of knowing how much they’d be paying (72%), with 23% acting on the advice of brokers and 11% locking in a fixed rate.
The primary goal when remortgaging was releasing equity or borrowing more money (29%), lower monthly payments (23%) and security over monthly payments (19%).
Loan size was increased by 46% of borrowers, with an average increase of £22,244. The 16% who reduced the total loan size saw an average decrease of £11,648, with 38% seeing no change.
In relation to repayments, 56% increased their monthly instalments by an average of £277.01, 33% reduced the payment by an average of £259.23 and 11% remained the same.
LMS CEO Nick Chadbourne commented:
“June presented a relatively flat picture for new remortgage instructions, indicating stability in borrower activity. Completions, however, saw a decline, resulting in a buildup of pipeline volumes as we headed into July. This slowdown in completions is not unexpected, given the significant spike in product expiries at the start of July, which naturally shifts completion activity into the new month.
“Looking ahead, we expect instruction volumes to remain broadly flat month-on-month through the remainder of the year. That said, instructions are still tracking around 20% higher than the same period last year, highlighting continued underlying strength. As with July, each quarter-end is likely to bring a pronounced spike in completions as more fixed-rate products reach maturity.”
The remortgage lending estimates are forecasts based on up-to-date internal conveyancing data from LMS, covering thousands of remortgage completion transactions.
