LMS’s latest Monthly Remortgage Snapshot revealed that UK remortgage activity cooled in August, with sharp falls in completions and a rise in cancellations.
Instructions for new remortgages fell by 8% compared with July, while completions were down 28%.
The overall cancellation rate rose 6% month on month and the remortgage pipeline slipped 1%.
Borrowers who did remortgage faced bigger payments. Average monthly repayments increased by £354, with nearly half (49%) of borrowers reporting higher costs.
Around 45% increased their total loan size, adding an average of £22,615, while 19% reduced borrowing by an average of £11,328.
2-year fixed rates were the most popular choice, accounting for 47% of remortgages.
A quarter of borrowers (26%) said their main aim was to secure lower monthly payments.
Regional data underline the scale of borrowing. The average remortgage loan in London was £370,227, 110% higher than the £176,365 average across the rest of the UK.
Nationwide, the average remortgage stood at £218,922. Previous mortgage terms averaged 71.7 months, ranging from 67.6 months in East Anglia to nearly 76 months in the North West.
Nick Chadbourne (pictured), CEO of LMS, said: “August saw the usual seasonal dip in remortgage activity, but the market remains resilient. The popularity of 2-year fixed-rate products suggests borrowers are hedging their bets, looking for short-term protection while keeping options open should rates ease over the next couple of years.
“With households now back into a routine after summer, we expect activity to build as the year progresses, echoing the rebound we saw this time last year.”
