The average monthly remortgage payment in the UK increased by £214.31 in August, according to new data from LMS.
The total number of remortgages in the UK in August also saw an increase to 53,141, a climb from 52,869 in July.
LMS CEO, Nick Chadbourne, commented: “With a significant peak in early redemption charge expiries on the horizon for October, we’re expecting a steady ramp up in remortgage activity over the next few months. Volumes are already up month on month and this trend should continue in Q4 as remortgaging continues to outperform other areas of the market.”
Ninety-five per cent of those who remortgaged in August opted for a fixed rate product, with only 3% of borrowers choosing a variable or tracker rate mortgage.
The LMS figures for August show that purchases of 5-year fixes fell from 50% to 48%, while there was a slight increase for 2-year fixes which rose from 34% to 35%. These remain the two most popular products, both remaining in front of purchasing levels for 10-year fixes – this figure showed little change and remained at 5%.
Chadbourne added: “Product purchasing levels remain consistent, but we do expect 10-year fixes to become increasingly popular in line with the current industry activity we are seeing. Borrowers are looking for certainty over their personal finances, and longer-term mortgage deals can provide this.
“There is a trade-off, however. In some instances, borrowers can expect to pay around 10% more per month for a 10-year fixed product compared to a 5-year product.”
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