36% of borrowers also increased their loan size
Remortgage instructions increased by 33% in January, with 25% more remortgages completed in the first month of 2023, conveyancing panel management services provider LMS has reported.
It added that the average monthly repayment increase was £239 for those who remortgaged in January, and that 36% of borrowers increased their loan size.
Nearly two-thirds, or 63%, of those who remortgaged took out a five-year fixed rate product, the most popular product in January. Over a third, or 37%, said their main aim when remortgaging was to gain longer term security.
“As predicted at the end of last year, there was a spike in instructions for January,” Nick Chadbourne (pictured), chief executive at LMS, commented. “This is the case every year since December instructions are always seasonably low, but this year’s figures are higher than January 2022, showing that those who were holding out for better rates are starting to return to the market.
“As appears to be an increasing trend, those who remortgaged in January were primarily seeking to attain longer term security with nearly two-thirds opting for five-year fixed rates, which continues to be the most popular product. With the increased completion rates following the festive period, the pipeline contracted but this was to be expected.”
Chadbourne added that moving forward, increased market activity is likely to continue with mortgage rates falling below 4% for the first time since September.
“This is despite the repeated Bank of England interest rate rises as these have already been priced into the market,” he noted. “As such, we expect to see instructions and the pipeline grow over the next few weeks as well as a rise in cancellations since borrowers who secured rates in December may well reapply at these more attractive rates.”
The monthly remortgage snapshot collates LMS data to provide a comprehensive overview of the remortgage activity across the month, revealing trends in the context of an unparalleled year.
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