There was a £310 average monthly payment increase for those who remortgaged in March, according to data gleaned from LMS’ Monthly Remortgage Snapshot, which details remortgage market activity through March 2023.
The research also found that 41% of borrowers increased their loan size in March, although overall remortgage activity dropped by over 7%.
53% of those who remortgaged took out a 5-year fixed rate product, the most popular product throughout the month, whilst 5% said their main aim when remortgaging was to gain longer term security.
The average remortgage loan amount in London and the South East was £294,960 while the average for the rest of the UK stood at £150,368, this put remortgage loan amounts almost 50% higher in London and the South East than in other areas across the country.
The longest previous mortgage length was found in the North East at 83.17 months (6.93 years) and the shortest was in West Midlands at 64.65 months (5.39 years), putting the longest previous mortgage term 22% longer than the shortest.
Nick Chadbourne (pictured), CEO of LMS said: “Although both completions are down and cancellations are up, this was expected.
“It is typical to see completions drop in the last month of a quarter as the next ERC spike looms and cancellations rising was simply due to the fact that borrowers who secured offers when rates were high continue to shop around for a more competitive deal.”
He added: “As the year progresses, we know that 2023 has a raft of product expiries that will culminate in the highest ERC spike for five years at the end of Q4.
“This will be somewhat offset by an increasing number of people looking for product transfers thanks to lessening affordability, but nevertheless we can expect a big build in instructions and pipelines as the year goes on. April will see the start of this, and we expect instructions to rise after the usual Easter dip.”
Chadbourne continued: “More generally, while products remain competitive, inflation also remains high so its normal to expect the Bank of England to raise the base rate over the summer.
“It’s not a given that this will impact mortgage products, but it will drive anyone with trackers or those on SVRs to change products and increase the pipeline further.”
