According to LMS’ monthly remortgage snapshot for November, completions fell by almost a quarter and instructions decreased by around four per cent.
The overall cancellation rate grew by five per cent, but pipeline cases increased by two per cent month-on-month.
The report found that nearly three quarters of those who remortgaged took out a five-year fixed rate. This was followed by 20 per cent taking out a two-year fixed rate and two per cent who took out a 10-year fixed rate or tracker respectively.
Nearly 60 per cent of those who remortgaged to a fixed rate said they wanted security over monthly repayments.
Around 34 per cent said they were worried about the economy, or job security, so wanted to lock in a fixed rate as soon as possible.
Most borrower upped total loan size
Nearly half of borrowers who remortgaged increased their loan size in November, with the average loan increase post remortgage coming to £19,542.
Around 20 per cent reduced their total loan size, with the average loan decrease post remortgage pegged at £14,583.
On the monthly repayment side, 69 per cent said that they increased their monthly mortgage repayments, with average monthly increase estimated at £250.
Approximately 22 per cent said they cut their monthly remortgage payments with the average reduction coming to £228.
Borrowers should engage broker at ‘earliest opportunity’
Nick Chadbourne (pictured), LMS’ CEO, said that while most metrics had fallen in November the growth in the pipeline showed people were “beginning to consider new products before their current deals expire”.
He continued: “The overall decline in activity was to be expected after the huge increase we saw in October as people hurried to lock in products before they were withdrawn, and with the impact of the Autumn Statement leaving many wondering what it means for their payments – many are biding their time and seeing how the rest of the year plays out before instructing.
“But despite this uncertainty, we would urge people to act sooner rather than later to avoid dropping onto a lender’s standard variable rate (SVR) which is now more expensive as rates are increasing while fixed rates continue to fall.”
Chadbourne said that the market was close to “being corrected” and the new year was “expected to bring a healthy product competition”. However, he warned that a substantial decrease in rates was unlikely.
“Borrowers would therefore do well to engage a broker at the earliest opportunity to stay informed of any likely product changes as, with lenders moving quickly, it is vital to ensure they are represented. This way, borrowers will be in a strong position to secure the most suitable rate when applying at the optimum time in the new year,” he advised.
