Instructions for remortgage are up 7.7 per cent month on month, but completions have fallen by 13 per cent, data from the group showed.
The most popular reason for a remortgage was to save money, with the average borrower lowering their repayments by £236.
Around half of remortgagers increased their loan size, according to LMS.
With the purchase market expected to come off the boil when the stamp duty holiday ends in March, remortgages are tipped to pick-up.
LMS chief executive Nick Chadbourne (pictured) said: “December’s data shows that instruction volumes are increasing again, following a fall in November which was largely fuelled by more borrowers opting for product transfers.
“It is promising to see this uplift, but high levels of PTs paired with record numbers of purchase transactions continue to impact overall volumes resulting in a lower number than what we would expect to see in December.
“We anticipate a reversal of 2020 trends in the second half of 2021, with remortgages taking the lead as the purchase market slows.
“There are signs that lenders are planning for this switch, reintroducing 90 per cent loan to value products and increasingly competitive remortgage products. Some savvy borrowers are already cashing in here, with our data showing borrowers who are shopping around for the best deals are decreasing their monthly payments by an average of £236 a month.”