The number of remortgages in the UK reached 635,277 in 2019, reflecting a rise of 4.2% from the previous year, new data published by LMS has revealed.

According to LMS’ 2019 Remortgage Snapshot, 46% of those who remortgaged in 2019 took out a 5-year fixed rate product, the most popular product in 2019.

LMS’ data also showed the end of year rolling average loan amount of £178,613 was up 2.3% from the £174,599 recorded in January 2019.

LMS CEO, Nick Chadbourne, suggested that 2019 brought ‘healthy’ remortgage volumes thanks to ‘enticingly low’ interest rates, to deliver a steady market over the year.

“After a particularly strong January, we saw a 10% increase in remortgage volumes from February to December,” Chadbourne commented. “It’s also positive to see that 67% of borrowers engaged with a broker during their remortgage, showing the value consumers still place on advice.

“Fixed-rate products were hugely popular across the whole of 2019, with 96% of borrowers choosing this type of deal and 5-year terms leading the way. This comes as no surprise, given that 2019 was a particularly uncertain period both politically and economically. Homeowners have been locking into low rates while they can, to secure some certainty for their own personal finances.”

Regionally, the LMS data showed that the longest previous mortgage length in 2019 was found in the North-East at 59.9 months, while the shortest was in East Anglia at 54.2 months – showing a disparity of 10.3%.

LMS also revealed the average remortgage loan amount in 2019 for London and the South-East was £276,510, while the average for the rest of the country sat lower at £174,711 – reflecting a difference of 58.2%.

Chadbourne added: “It’s uncertain how the remortgage market will evolve as we move into 2020. Product expiries for the year look set to mirror 2019, so we can expect similar volumes throughout 2020, but we may see a flat first half as the home moving market picks up.

“Product choices might change too, as borrowers could opt for shorter-term fixes as fears of a base rate increase subside. The growth in product transfer rates will also be a key factor, so it’ll be interesting to see how newer entrants shape their offerings to compete – ERC-free products, the removal of LTV bandings, and an increase in digital-only products are all possible.

“We’ll be continually reviewing our data for changes in market trends and the overall health of the sector, and the balance between the purchase and remortgage sides of the market.”

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