Remortgages lifted by 14% in January compared to a month ago as mortgage rates stabilise, according to data LMS.
Last month also saw instructions jump 70% as the average remortgage loan amount in London came in at £378,477, with the rest of the UK standing at £175,186, the conveyancing services firm’s latest Remortgage Snapshot shows.
The average monthly payment increase for those who remortgaged in January was £381, while 77% of borrowers lifted their loan sizes to an average of £18,809.
The report adds that 45% of those who remortgaged took out a two-year fixed-rate deal, which was the most popular product last month.
LMS chief executive Nick Chadbourne says: “As swap rates continue to stabilise, we have seen an increase in competition among lenders and more favourable pricing options for remortgaging customers.
“There has been a noticeable shift towards shorter-term fixed-rate options too, with 45% of remortgagers taking out a two-year fixed-rate product – the most popular choice in January.
“Customers are adapting to the ‘new normal’ for rates and are seeking short-term products so they can reassess their options if rates decrease further in the future.
“While we’ve seen a decline in average mortgage rates, recent data highlights that house prices have risen at their fastest rate since this time last year, with a 2.5% increase.
“This may result in a more favourable loan-to-value ratio for many customers and we anticipate this will lead to a more pronounced uptick in market activity in the coming months.”
The average two-year mortgage fix is 5.03%, up from 5.02% a year ago, according to the latest Rightmove weekly mortgage tracker. The average five-year mortgage fix is 4.69%, down from 4.70% over the same period.
