Remortgagers saw a £329 average monthly repayment increase in December, according to LMS‘ latest Monthly Remortgage Snapshot.
In addition, nearly 40% of borrowers increased their loan size in December.
Of those who chose to remortgage, 42% took out a 2-year fixed rate product, making it the most popular product for the month.
A third (33%) of remortgagers said their main aim was to lower their monthly payments.
Nick Chadbourne (pictured), CEO of LMS, said: “As predicted in our November snapshot, falling swap rates have indeed meant that lenders started to be much more competitive on pricing in December.
“This is naturally makes a full remortgage much more favourable to borrowers and as such we have seen 49% more completions and the first fall in the cancellation rate in four months.
“2-year fixes remain the most popular product which is unsurprising and we expect this trend to continue, at least in the first half of 2024.
“The continued drop in swap rates is an indication that inflation will fall and so it’s widely predicted that the Bank of England will cut the base rate this year.
“Naturally this will result in lower mortgage rates, so those needing to remortgage now will be unlikely to want to tie themselves in for more time than they have to.
“On top of that, house prices have fallen, albeit slowly, increasing affordability – all of these factors make remortgages more favourable to product transfers once more, so we expect the pipeline to pick up in January after the December contraction.”
