According to LMS’ monthly remortgage snapshot for October, the overall cancellation rate fell by around 20 per cent to 4.69 per cent, while pipeline cases decreased by two per cent month-on-month.
The report also found that 65 per cent opted for a five-year fixed, 27 per cent choose a two-year fixed rate and two per cent selected a 10-year fixed rate. Only one per cent selected a tracker deal.
The biggest priority for choosing a fixed rate was security over monthly payments at 61 per cent. This was followed by 32 per cent who were worried about the economy and wanted to lock in a deal and those who were worried about job security respectively.
Locking in a good deal
The main goal for remortgage was to lock in a good deal at 33 per cent, which was followed by releasing equity at 25 per cent and 20 per cent who wanted to lower their monthly payments.
LMS said that just under half, 43 per cent of borrowers, increased their loan size in October, with the average loan size increase pegged at £20,791.
For those the 21 per cent who cut their total loan size the average loan decrease came to £14,583.
Around 67 per cent said they increased their monthly repayments, with average monthly repayment increase coming to £247.
Around 21 per cent said they reduced their monthly repayments, with the average monthly repayment decrease set at £223.
‘The most proactive of borrowers will look to instruct sooner rather than later’
Nick Chadbourne (pictured), LMS’ CEO, said that October saw a “big increase in completions” as people looked to lock in products before any potential rate changes caused them to be withdrawn.
He continued that the marginal increase in instructions showed that many who were yet to start the remortgage process were “waiting to see what November brought before instructing”. He noted that November “will be a big month with both the interest rate decision and the Autumn Budget”.
“Although product rates are slowly coming down, they are still out of kilter with Standard Variable Rates (SVR). As such, some borrowers might wait and see if rates will fall in January before remortgaging because there seems to be little danger of dropping onto a less favourable rate.”
Chadbourne said that this approach came with an element of risk as there was no guarantee that swap rates and product rates would not rise again.
“The most proactive of borrowers will look to instruct sooner rather than later to mitigate this, and so we expect instructions to rise ahead of the next big ERC expiry date at the end of the year,” he concluded.
