According to LMS’ remortgage snapshot for June, instructions fell by around 13 per cent and 35 per cent less remortgages were completed.
However, the pipeline of cases rose by 10 per cent, which LMS’ chief executive Nick Chadbourne (pictured) said was the biggest monthly increase in pipeline cases since the start of the year.
The average loan increase post-remortgage came to £22,644 and the average loan decrease was £11,272.
Over half, 52 per cent, increased their loan size, 30 per cent saw no change in their total loan size and 18 per cent cut their total loan size.
Average monthly repayments rose by £236, and the average monthly repayment decrease was £195.
Around half, 46 per cent, upped their monthly remortgage payments, 43 per cent cut their monthly remortgage repayments and 11 per cent saw no change.
The majority, 67 per cent, opted for a five-year fixed rate, followed by 24 per cent for a two-year fixed rate.
Only three per cent chose a 10-year fixed rate while one per cent chose tracker products.
Most people, 62 per cent, cited security over monthly payments as their motivation for a fixed rate and 23 per cent said they were worried about the economy and wanted to lock in a rate.
Around 13 per cent said they were concerned about their job security.
The most popular goal when remortgaging was to release equity at 30 per cent, which was followed by lowering monthly payments at 22 per cent and locking in a good deal at 20 per cent.
Chadbourne said that there would be an uptick in remortgage activity as more consumers used remortgage to offset the rising cost of living.
“With the next early repayment charge (ERC) date coming up in July, we expect instructions will pick up again,” he explained.
He added that unlike in previous months when the primary motivation for a remortgage was to lower monthly repayments, in June more people wanted to borrow more money.
Chadbourne explained: “It could be that more consumers are looking to secure longer term fixed rate products to improve financial security and manage the cost of living struggles.
“As this crisis intensifies further and fears of a recession mount, this trend is likely to continue and the industry will need to cope with increased demand. Using tech to automate simple cases or speed up post-offer queries can be a good place to start.”
