Although instruction volumes dropped by 24%, remortgage completions rose by 78% in July 2020, according to LMS’ Monthly Remortgage Snapshot.
The cancellation rate increased by 1.29% to 6.93% in July, and pipeline figures dropped 14% since the end of June.
The average monthly payment decrease for customers who remortgaged during July was £200.76.
Remortgage volumes remain high
31% of borrowers remortgaged for the purposes of lowering their monthly payments, while two-fifths (39%) increased their loan size.
Almost half (47%) of those who remortgaged took out a 5-year fixed rate product; this was the most popular product choice in July.
The average loan increase post-remortgage was £20,208, while the average decrease was £10,497.
Nick Chadbourne, CEO of LMS, said: “July’s data illustrates that the landscape has changed and the remortgage market continues to evolve.”
“Consumer behaviours have inevitably altered in response to the pandemic, with 1 in 6 borrowers reportedly taking a mortgage payment holiday.
“However, completion volumes nearly doubled from June to July, as many people look for security and certainty in their personal finances.
“This, combined with higher rates of conversion and decreasing instruction volumes, has resulted in a reduced pipeline heading into August.
“5-year fixes are rising again following the initial drop we saw in April, which isn’t surprising as borrowers look to lock in longer term deals with interest rates at all-time lows.
“Nearly three quarters of borrowers reported their motivations for remortgaging coming from a need for monthly payment security, which is a strong indicator of borrower behaviour.
“With the full effects of COVID-19 on the housing market unknown, we expect this trend to continue as borrowers look for certainty in their monthly outgoings.”