Remortgage instructions fell by 8% in the month of August, the latest findings from LMS’s Monthly Remortgage Snapshot revealed.
The research also found that there were 10% less remortgages completed in August when compared to the month prior, while the overall cancellation rate increased by 0.52% to 6.29%.
Pipeline cases increased by 2% month on month and the average monthly payment increased by £328.50 for those who remortgaged during the period.
40% of borrowers increased their loan size in August, while 48% of those who remortgaged took out a 5-year fixed rate product.
The average remortgage loan amount in London and the South East was £290,250 while the average for the rest of the UK stood at £151,457, putting remortgage loan amounts 62.8% higher in London and the South East than the rest of the UK.
Although this percentage is still very high, it has significantly dropped since July’s results that identified a 98% difference between those regions.
The longest previous mortgage length was found in North East at 79.32 months (6.61 years) and the shortest was in the East Midlands at 67.24 months (5.60 years), putting the longest previous mortgage term 16.48% longer than the shortest.
Nick Chadbourne (pictured), CEO at LMS, said: “As expected, in August, we’ve seen a seasonal dip in both instructions and completions with borrowers anticipating a cut in rates from various lenders.
“Earlier this month, this prediction was confirmed following a Bank of England comment that stated that interest rates may be near their peak.
“As a result, mortgage lenders started to announce further reductions to their fixed rates.”
He continued: “With the above plans in mind, borrowers have opted back for a 5-year fixed rate plan, the most popular product in August, as an opportunity to lock down a better deal for longer.
“The goals for remortgaging were primarily focused on borrowers looking to lower their monthly payments and give themselves longer-term security which could have also contributed to the 5-year fixed rates regaining ground.
“With the next Bank of England announcement expected to be disclosed today, borrowers should capitalise on the current conditions to secure their financial future.
“Borrowers would be wise to speak to a broker early enough and explore various options that work for their individual needs in order to secure the best possible deal.”
