43% of borrowers raised their loan size, and 54% of those who remortgaged took out a 5-year fixed rate product
Remortgage completions volumes increased by 4.7% in March, according to LMS’ Monthly Remortgage Snapshot.
In addition, instruction volumes continued to rise, up 17.2% in January.
The cancellation rate rose by 0.5% to 7.45% in March, and pipeline figures increased by 12.8%.
The average monthly payment decrease for those who remortgaged in January was £238.
A total of 43% of borrowers raised their loan size, and 54% of those who remortgaged took out a 5-year fixed rate product which was the most popular product length.
The most popular primary aim when remortgaging, at 33%, was to borrow more money.
The average loan increase post remortgage was £22,999, whilst the average loan decrease post remortgage was £15,523.
Nick Chadbourne, chief executive of LMS, said: Remortgage instructions grew by nearly a quarter in March as the stamp duty holiday extension increased industry capacity by taking pressure off the purchase market.
March also brought the market right up to the five year anniversary of 2016’s stamp duty cut for buy-to-let purchasers, which will have contributed to the increase as many landlords begun the remortgage process as their 5-year fixes came to an end, he said. These factors are the most likely cause for the pipeline growth as cancellations remained fairly steady.
The purchase market is likely to retain the lion’s share of mortgage business through Q2 as government support such as the 95% government-backed LTV scheme and SDLT holiday continue to prop up an already busy market, but this balance should shift as the incentives offered by the stamp duty holiday reduce at the end of June, Chadbourne said.
He said: Remortgage-focused businesses should prepare for a growth in enquiries but shouldn’t abandon the other business streams which many have explored while purchases were on top – growth at any time should be seized with both hands, but those who are still reliant on old processes will struggle.
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