Expert predicts pipeline to swell in H2 with over half a million remortgaging
Monthly payments increased by an average of £317.20 for almost a third, or 65%, of those who remortgaged in May, according to conveyancing services provider LMS.
Its latest Monthly Remortgage Snapshot showed that 10% saw no change in their monthly remortgage repayments, while the remaining 25% reduced their monthly remortgage repayments by an average of £284.32.
Instructions increased by 11% last month, and 43% of borrowers increased their loan size.
Half of those who remortgaged took out a five-year fixed rate product, which was the most popular product in May. More than a quarter, or 29%, said their main aim when remortgaging was to lower their monthly payments.
LMS also reported that remortgage loan amounts were almost 65% higher in London and the South East at £294,302, compared with the rest of the UK at £149,760.10.
“As predicted, instructions increased again in May following a seasonal dip the month before,” said Nick Chadbourne (pictured), chief executive at LMS. “Until now, we have seen a lot of people stay on variable rates in the hope that, if they stick it out, rates will fall.
“However, the base rate increased to 4.5% early on, so it’s not a huge surprise that people looking to remortgage when their product expires are aiming to come off SVRs for more stability.”
Chadbourne added that as the second half of the year approaches, they expect a big jump in instructions and the pipeline to swell.
“It will be the busiest in terms of product expiries since the 2008 credit crunch, with well over half a million people expected to remortgage,” he said. “Anyone doing so may well choose a two-year fix in the expectation of a lower rate next time. If the market predictions are correct, this would be wise as rates will likely come down during 2024.”
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