The LMS monthly remortgage snapshot for December reveals a £329 average monthly repayment increase for those who remortgaged in December.
It also shows that 40% of borrowers increased their loan size in December and that 42% of those who remortgaged took out a 2-year fixed rate product, the most popular product in December.
Some 33% said their main aim when remortgaging was to lower their monthly payments, the most popular response.
In terms of remortgage loan sizes: 40% increased their total loan size; 35% saw no change in their loan size and 25% reduced their total loan size
Commenting on the latest data LMS chief executive Nick Chadbourne said: “Remortgages on the rise as predicted base rate cuts on the horizon, but shorter fixes still reign supreme.
“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”.
Chadbourne pointed out that two year fixes remained the most popular product which he said was unsurprising and he expects 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.”
