The index was down 5.4 points to 54.8, compared to 60.2 in Q3 2020. The index has therefore fallen from a positive to a neutral outlook.
However, LMS chief executive Nick Chadbourne (pictured) said good performances from two of the index’s four indicators suggested, “a positive outlook for remortgaging in 2021”.
The two indicators that increased were homeowner equity, up 7.8 points to 73.9, and consumer sentiment, up 2.7 points to 57.3.
Homeowner equity was the only one of the four indicators to score in the positive range, with the other three all neutral for the quarter.
The remortgage approvals score fell by 14.4 points to 56.5 and borrowing costs dropped 10.9 points to 41.2, compared to Q3.
Chadbourne said: “Despite the fall in the overall index score, we can see a positive outlook for remortgaging in 2021.
“The main drivers of the fall were lower remortgage approvals and borrowing costs indicator scores, but given the wider economic and social climate these were not unexpected.
“We’ve already seen an uptick in remortgage activity in Q1 2021,” he said.
The LMS Remortgage Healthcheck Index consists of four indicators scored from 0 to 100. Scores from 40 to 60 indicate a neutral outlook, while a score below 40 is negative and over 60 is positive.
The overall index represents the weighted average of each indicator score.