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August 3, 2021The volume of remortgage completions fell by 5% in June, according to the LMS Monthly Remortgage Snapshot.
However, while remortgage completions slowed, instruction volumes increased by 16.% over the same timeframe.
The overall cancellation rate decreased by 0.45% to 6.01%, while pipeline cases rose by 11% in June.
The average monthly payment decrease for those who remortgaged was £200, and the average monthly mortgage increase was £261.
A total of 42% of borrowers increased their loan size and 49% of those who remortgaged took out a 5-year fixed rate product, which was the most popular product length.
More than a third (36%) of remortgagers said their primary aim was to release equity from their property.
The average loan increase post-remortgage was £21,586, whilst the average loan decrease was £12,217.
The average remortgage loan amount in London and the South East was £283,685, while the average for the rest of the UK stood at £143,220; this puts remortgage loan amounts 98% higher in London and the South East than the rest of England and Wales.
The longest previous mortgage length was found in the North East at 84.36 months (7.03 years) and the shortest was in the West Midlands at 62.59 months (5.2 years), meaning that the longest was 35% longer than the shortest.
Nick Chadbourne, chief executive of LMS, said: “Steady activity and easing restrictions continued to improve lender confidence in June which gave borrowers greater product choice and better deals.
“However, instructions were still not as high as we would expect in the lead up to the large number of [early repayment charge (ERC)] expiries in July.
“This means that many borrowers who are remortgaging are opting for a product transfer.
“As low interest rates are still in place across the board, staying with the same lender may give borrowers a cheaper rate than switching, but it is still important that borrowers shop around to ensure they are getting the best deal possible.
“As the purchase market continues to boom, supply is the only factor which might slow it down.
“The end of the stamp duty holiday will have had some impact, but the key drivers to move out of cities, find green space and upsize are all still there to drive demand.
“Until supply is properly addressed, inflated house prices and competitive mortgage rates are expected to stay.
“We expect to see more borrowers opting to stay put in this environment, boosting remortgage activity and contributing to a healthy pipeline in the coming months.”
