According to LMS’ monthly remortgage snapshot, raising capital appeared to be a priority for borrowers as 36 per cent refinanced to release equity from their homes.
The average increase in loan size was £21,586.
Securing a favourable rate was also a motivation for many borrowers. This was evidenced by 49 per cent of remortgagors who went for a five-year fixed rate product.
The data showed 77 per cent chose their product as they wanted stability with their payments, while 13 per cent opted to lock into a good rate now.
The desire to secure a particular rate was coupled with fears expressed by 51 per cent of respondents who expected interest rates to rise within the next year. Meanwhile, 36 per cent thought hikes were more likely to happen after 12 months.
In June, some 36 per cent of borrowers opted for a two-year fixed rate product, while just four per cent went for a 10-year fix. A further four per cent chose a tracker mortgage.
Of the 38 per cent who remortgaged to decrease their monthly payments in June, the average reduction was £200.
Nick Chadbourne, CEO of LMS, said: “Steady activity and easing restrictions continue 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.”
Instructions rose by 16 per cent in June, but there were five per cent fewer remortgages completed compared to last month.
Chadbourne added: “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.”
