The mortgage market recovered slightly in October following the ERC expiry peak and the change in Government, according to LMS’s Monthly Remortgage Snapshot.
Data by LMS found there was a 35% increase in remortgage completions, as well as a £247 monthly payment increase for those who remortgaged in October.
Furthermore, 44% of borrowers increased their loan size in October, and of those who remortgaged during the month, 65% took out a 5-year fixed rate product.
Nick Chadbourne, CEO at LMS said: “October saw a big increase in completions as people looked to lock in the products they secured before any potential rate change causes them to be withdrawn.
“For those who had yet to start the remortgage process, the marginal increase in instructions makes it clear that they are waiting to see what November brings before instructing, especially as it will be a big month with both the interest rate decision and the Autumn Budget.”
Additionally, 33% of respondents to LMS’ research said that their main aim when remortgaging was to gain longer term security.
The average remortgage loan amount in London and the South East was found to be £332,937, while the average for the rest of the UK stood at £156,169.
This puts remortgage loan amounts 113% higher in London and the South East than the rest of the UK.
The longest previous mortgage length was found in Wales at 78.67 months (6.56 years) and the shortest was in London at 57.91 months (4.83 years), putting the longest previous mortgage term 35% longer than the shortest.
Chadbourne added: “Although product rates are slowly coming down, they are still out of kilter with SVRs.
“As such, some borrowers might wait and see if rates will fall in January before remortgaging because there seems to be little danger of dropping onto a less favourable rate.
“However, this approach comes with an element of risk in that there is no guarantee that swap rates and therefore product rates won’t increase again.
“The most proactive of borrowers will look to instruct sooner rather than later to mitigate this, and so we expect instructions to rise ahead of the next big ERC expiry date at the end of the year.”
