The LMS remortgage snapshot for the month showed remortgage completions rose by more than two-fold in September and half of those who refinanced fixed for five years. The firm suggested this was to offset any potential rises in monthly repayments due to higher rates.
Two-fifths of remortgagors fixed for two years while two per cent opted for 10-year fixes and two per cent chose tracker products.
According to the survey, 55 per cent of borrowers expected rates to go up within the next year.
The average decline in mortgage repayments for those who refinanced in September was £235.
Some 45 per cent took the opportunity to increase their loan size by an average of £21,584. This coincided with releasing equity being cited as the second most popular reason for remortgaging, as stated by a quarter of borrowers. The most popular reason was to lower monthly payments, as mentioned by 28 per cent of respondents.
Nick Chadbourne, chief executive of LMS, said: “Remortgage instructions rose by 50 per cent in September as rumours of an interest rate rise loom large, which may impact the cost of mortgages. Savvy borrowers nearing the end of their current term, and their brokers, will have anticipated this and have begun to shop around to secure a longer fixed-rate deal to weather any increases in their monthly repayments.
“The number of remortgage completions soared to 108 per cent, as September marked one of the highest numbers of early repayment charge (ERC) expiries of the year.”
He added: “As some lenders will be inundated with cases as a result of the current rate wars, panel managers will have an important role to play in mitigating any mismatch in capacity across the industry, by ensuring that instructions are evenly balanced between firms to maintain service levels.”