Total remortgage instructions increased by 24% in June, according to new data gleaned from LMS’ Monthly Remortgage Snapshot.
The snapshot also found that, in the month of June, 48% of borrowers increased their loan size and a further 46% of those who remortgaged took out a 5-year fixed rate product.
Remortgagers also saw an average payment increase of over £292.64 throughout the period.
26% of remortgagers who responded to the report said that their main aim in remortgaging was to lower their monthly payments.
Nick Chadbourne (pictured), CEO at LMS, said: “Since it’s the end of the second quarter, June always sees a spike in remortgage completions.
“Instructions also rose because borrowers are now confident that rates won’t be falling in the foreseeable future, so they are looking to secure a product now before they potentially increase along with the expected base rate trajectory.
“We will see this trend continue into H2 with over half a million borrowers nearing the end of their current mortgage term.”
He added: “The challenge is affordability – even with stress tests a thing of the past, banks will be wrestling with this, especially as the Consumer Duty comes into effect.
“Rising rates create challenges for banks looking to onboard new customers – products continue to change rapidly and many continue to opt for product transfers.
“However, shopping around with the help of a broker is critical in such an environment so borrowers would be well advised to do so to get the best possible deal.”
The report also found that the average remortgage loan amount in London and the South East was £310,080.
While the average for the rest of the UK stood at £154,867, this put remortgage loan amounts almost 100% higher in London and the South East than the rest of the UK.
