An increasing number of UK homeowners are reassessing their mortgage options due to the recent rise in interest rates, data from Legal & General’s (L&G) SmartrFit affordability tool has revealed.

The tool found that searches made on the SmartrFit platform on behalf of borrowers looking to remortgage after less than six months increased by 31% from April to May.

Activity from overseas buyers continues to rise, as ‘Visa’ remains the most popular criteria used, after spending eight months at the top spot of searches. Searches on behalf of borrowers with a visa increased by 28%.

May also saw a surge of 30% in searches from expats not in the UK, and 13% for searches on behalf of those with a deposit from a foreign source.

L&G suggested that the increase in searches around remortgaging suggests that borrowers could be looking to pay early repayment charges (ERCs) in order to lock in more favourable rates.

L&G’s search data also indicates that buyers are relying on the Bank of Mum and Dad for gifting and financial support, shown by an increase of 44% in the number of searches for joint borrower-sole proprietor mortgages, and a 33% increase in searches for borrowers using gifted equity. This is also supported by a substantial 53% increase in retirement interest only (RIO) searches, which points to retired borrowers taking out loans to support family through gifting.

As well as an increase in demand for environmentally friendly mortgages, the data also demonstrates resilience in the buy-to-let (BTL) sector. May saw a 66% rise in searches for onward loan-to-value products form buyers with a let-to-buy mortgage, and 18% from limited companies with BTL mortgages.

The increases points to strength in the BTL market, despite recent news on landlords selling up. L&G indicate that some buyers are still eager to proceed with their purchase plans, but are unable to secure their desired price, which potentially shows a slowdown in the market. ‘Holiday Let’ and ‘Air B&B’ searches also increased by 19%.

Head of mortgage products and transformation at L&G Technology, Jodie White, said: “As people look to re-evaluate their finances in response to ongoing cost of living pressures, and with an estimated 1.8 million fixed rate deals due to end this year according to UK Finance, the remortgaging boom comes as no surprise.

“The resilience of the housing market, as demonstrated by persistent overseas activity and interest within the BTL sector, is also a reassuring reminder that despite the headwinds facing the mortgage market and consumers in general, there is little evidence to suggest any need to panic.

“When supporting borrowers during this time, particularly those that are vulnerable or struggling to keep up with payments, it is crucial that brokers implement new technologies to help manage the current demand for financial guidance. By integrating tools such as CRM software and open data platforms into their advice process, brokers can reduce the time spent on manual tasks, and free up resource to focus on fostering good customer outcomes through high quality advice.”

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