Remortgage instructions and completions down by 13% and 12% respectively
Monthly payments increased by an average of £317.20 for 39% of those who remortgaged in October, according to conveyancing services provider LMS.
Its latest Monthly Remortgage Snapshot showed that 36% saw no change in their monthly remortgage repayments, while the remaining 25% reduced their monthly remortgage repayments by an average of £171.45.
Instructions decreased by 13% last month, and 12% less remortgages were completed.
Around four in 10, or 41%, of those who remortgaged took out a two-year fixed rate product, which was the most popular product in October. Two thirds, or 67%, said their main aim when remortgaging was to gain longer term security.
LMS also reported that remortgage loan amounts were 43.6% higher in London and the South East at £356,195 compared with the rest of the UK at £200,913.
"Remo pipeline drops as expected as economic circumstances increase product transfers,” commented Nick Chadbourne (pictured), chief executive at LMS. “October has seen an ongoing fall in remortgage activity – instructions fell, cancellations increased and while the pipeline only dropped slightly, this is because completions also decreased – that is to say, there has been a fall in the number of cases successfully progressing to the end of the process.
“This was entirely expected. While interest rates have stabilised for now, they remain high and unlikely to drop until late 2024, and, in the current cost-of-living crisis, borrowers are understandably avoiding the need to undergo affordability tests by opting for product transfers instead.
“This is predicted to remain the case in November and throughout Q4. There are almost a million products maturing this side of Christmas, but we expect the vast majority of these to opt for product transfers while those who need to remortgage will continue to favour two-year fixes as they have done this month in the hope that rates fall by 2025.”
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