Instructions for remortgages increased by 31%, while completions dropped by 1%, LMS’ Monthly Remortgage Snapshot has revealed.
The research revealed that the cancellation rate jumped by 49%, while the pipeline remained unchanged.
Borrowers who remortgaged faced an average monthly payment increase of £288.18.
Regionally, London had an average remortgage loan amount of £348,258, 107% higher than the rest of the UK, which averaged at £168,603.
The North East had the longest previous mortgage length at 82.19 months, while East Anglia had the shortest at 67.87 months.
Research also found that 39% of borrowers increased their loan size in January, with the average loan boost £21,195.
In contrast, 25% reduced their loan amounts, with an average decrease of £13,763.
Of those who remortgaged, 45% opted for a 5-year fixed rate product – the most common product choice during the period.
Regarding interest rate expectations, 49% anticipated increases within the next year.
Nick Chadbourne, CEO of LMS, said: “The remortgage stats for December and January followed the usual trends with instructions slowing and conveyancers using the new year as an opportunity to clear the pipeline, hence the variation in cancellations.
“However, we know that 2025 is set to experience the highest number of product expiries since the pandemic.
“And it’s the pandemic (and Liz Truss) we have to thank for such a bumper year.”
Chadbourne added: “Think back to 2020 when Stamp Duty changes had everyone moving to the country; these people took out 5-year deals.
“Then later, in 2023, we experienced a jump in rates due to Ms Truss, which made 2-year fixed rates the way to go.
“Now, in 2025, we will see both the 5-year and 2-year deals expire, resulting in a double bumper year!”
He said: “Thankfully, since the pandemic, we have further embraced automation, implementing it, along with levels of resilience, into our remortgage processing.
“So, lenders can confidently get on with connecting with customers while knowing that the process is just as slick in the background.
“What else will 2025 bring? Well, there have already been many surprises, and we are only in February!”
He added: “From smart data announcements, artificial intelligence (AI) u-turns by our Government, and the US apparently in their ‘move fast and break things’ era, I think it’s fair to say that 2025 may well be the year for remortgages, but also one that will continue to be full of surprises.”
