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Remortgage activity dropped by a tenth in August – LMS

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  • 21/09/2023
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Remortgage activity dropped by a tenth in August – LMS
There were 10 per cent fewer remortgages completed in August and instructions fell by eight per cent as the market experienced its usual seasonal dip, data from a conveyancing firm showed.

The LMS monthly remortgage snapshot showed that the cancellation rate rose by 0.52 per cent to 6.29 per cent and five-year fixed products were the most popular choice. 

The firm said 48 per cent of remortgagors opted for the slightly longer fixed term as borrowers had probably accepted that rates were nearing their peak. 

Some 37 per cent of people chose a two-year fix. 

Some 69 per cent of borrowers saw their monthly mortgage payments increase by an average of £328.50 a month. For the 21 per cent whose monthly payments fell, there was a decrease of £315.42 on average. 

Two thirds of people who selected a fixed rate deal wanted security over future payments while nearly a quarter had worries about the economy and wanted to lock in a fixed rate now. 

Some 83.92 per cent of remortgagors expected interest rates to rise within the next year. 

Nick Chadbourne (pictured), CEO at LMS, said: “As expected, in August, we’ve seen a seasonal dip in both instructions and completions with borrowers anticipating a cut in rates from various lenders. Earlier this month, this prediction was confirmed following a Bank of England comment that stated that interest rates may be near their peak.  

“As a result, mortgage lenders started to announce further reductions to their fixed rates.” 

He added: “With the above plans in mind, borrowers have opted back for a five-year fixed rate plan, the most popular product in August, as an opportunity to lock down a better deal for longer.  

“The goals for remortgaging were primarily focused on borrowers looking to lower their monthly payments and give themselves longer-term security which could have also contributed to the five-year fixed rates regaining ground.”  

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