The number of borrowers who remortgaged slipped by 7% in March, but their monthly loans lifted by £310, data from LMS shows.
The average remortgage loan amount in London and the South East was £294,960 while the average for the rest of the UK stood at £150,368, says the conveyancing services firm’s latest Monthly Remortgage Snapshot.
It found that 41% of customers increased their loan size by an average of £20,475.
Over half, or 53%, of those who changed their home loans took out a five-year fixed rate product, with 25% of remortgagers saying their main aim was to “gain longer-term security”, the most popular cited response.
The average two-year fixed-rate home loan has leapt from 2.38% last January to 5.32% last week, according to data from Moneyfacts. The average five-year fixed-rate home loan has risen from 2.66% to 5.05% over the same period.
LMS Chief Executive Nick Chadbourne says: “Although both completions are down and cancellations are up, this was expected.
“It is typical to see completions drop in the last month of a quarter as the next early repayment charge spike looms and cancellations rising was simply due to the fact that borrowers who secured offers when rates were high continue to shop around for a more competitive deal.
“As the year progresses, we know that 2023 has a raft of product expiries that will culminate in the highest early repayment charge spike for five years at the end of the fourth quarter.
“This will be somewhat offset by an increasing number of people looking for product transfers thanks to lessening affordability, but nevertheless we can expect a big build in instructions and pipelines as the year goes on.
“April will see the start of this, and we expect instructions to rise after the usual Easter dip.
“More generally, while products remain competitive, inflation also remains high so it’s normal to expect the Bank of England to raise the base rate over the summer.”
“It’s not a given that this will impact mortgage products, but it will drive anyone with trackers or those on standard variable rates to change products and increase the pipeline further.”
