Remortgage instructions jump 16% in June

Instructions across the remortgage market rose by 16% in June, according to new data published by LMS.

The latest Monthly Remortgage Snapshot from LMS revealed that despite this climb, there were 5% fewer remortgages completed in June compared to May.

Figures also showed that the overall cancellation rate for remortgages fell slightly by 0.45% in June to sit at 6.01%. LMS reported that this flat cancellation rate, coupled with the climb in instructions, means remortgages cases in the pipeline increased by 11% during June.

Elsewhere, the LMS data showed that the average monthly payment decrease for those who remortgaged in June sat at £200, while 55% of borrowers increased their loan size during the month. Almost half (49%) of those who remortgaged took out a five-year fixed rate product, which was the most popular product in June.

LMS CEO, Nick Chadbourne, said that steady activity and easing restrictions continued to improve lender confidence in June, which gave borrowers greater product choice and better deals.

“However, instructions were still not as high as we would expect in the lead up to the large number of ERC expiries in July,” Chadbourne warned.

“This means that many borrowers who are remortgaging are opting for a product transfer. As low interest rates are still in place across the board, staying with the same lender may give borrowers a cheaper rate than switching, but it is still important that borrowers shop around to ensure they are getting the best deal possible.

“As the purchase market continues to boom, supply is the only factor which might slow it down. The end of the stamp duty holiday will have had some impact, but the key drivers to move out of cities, find green space and upsize are all still there to drive demand.

“Until supply is properly addressed, inflated house prices and competitive mortgage rates are expected to stay. We expect to see more borrowers opting to stay put in this environment, boosting remortgage activity and contributing to a healthy pipeline in the coming months.”

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