Remortgage completions down again
Monthly payments increased by an average of £421.79 with 43% of borrowers increasing their loan size in November, according to conveyancing services provider LMS.
Its latest Monthly Remortgage Snapshot showed that 37% saw no change in their total loan size and 20% reduced their total loan size.
Average loan increase post remortgage was £24,870 while average loan decrease post remortgage was £20,261 last month.
Instructions increased by 1% last month, and 29% less remortgages were completed.
Over a third, or 36%, of those who remortgaged took out a five-year fixed rate product, which was the most popular product in November. More than a quarter, or 27%, said their main aim when remortgaging was to lower their monthly payments.
LMS also reported that the average remortgage loan amount was 51.6% higher in London at £341,684 compared with the rest of the UK at £201,440.
“Although the contraction of the overall pipeline was not as significant this month compared to October, we are still seeing a drop in remortgage activity,” commented Nick Chadbourne (pictured), chief executive at LMS. “While we saw a marginal increase in instructions, cases did not progress through the journey: 29% fewer remortgages were completed in November and cancellations increased for the third consecutive month.
“Instead, product transfers have been particularly attractive for borrowers looking for a comparable product, which has only exacerbated what is always a time of reduced activity over the festive period.
“All of that said, swap rates are dropping which may be a sign of a further drop in inflation on the horizon. Lenders are being more competitive with pricing as they start to look towards 2024, especially as house prices are also falling. This is giving rise to additional borrowing requirements or changes in terms, or both, which naturally are more conducive to a full remortgage, so we expect the pipeline to pick up at the start of the new year.”
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