A spike in remortgage activity was recorded in May as borrowers looked to beat further interest rate rises, data from Legal & General Mortgage Club’s SmartrCriteria tool has suggested.
Searches for homeowners wanting to remortgage after just six months increased by 20%.
L&G Mortgage Club said this may indicate that concerns about rising interest rates could be prompting borrowers to obtain fixed deals over tracker mortgages, or lock into low rates that are still available on the market.
The latest data comes from the mortgage Club’s SmartrCriteria tool, which tracks product searches from over 8,000 advisers to highlight the purchase trends across the UK market.
As consumers continue to navigate the ongoing cost-of-living crisis, searches on behalf of those with missed mortgage payments and unsecured arrears grew by 20% and 10% respectively.
The data also suggested that more borrowers are seeking financial support from loved ones to progress with their purchase plans. Searches for joint borrower sole proprietor mortgages increased by 27% during May, while searches for products that accept shared equity climbed by 40%.
L&G Mortgage Club head of broker and propositions, Clare Beardmore, said: “Following a further increase in the Bank of England base rate in June, it is perhaps unsurprising that remortgage activity is on the rise, as borrowers look to lock in competitive rates while they still can.
“While we have seen a lot of repricing from lenders, there are still a very wide range of competitively priced products available, both for homeowners looking to remortgage and potential borrowers looking to step onto the property ladder.”
Searches on behalf of first-time buyers also increased by 16% in May. L&G Mortgage Club suggested that many of these borrowers will be looking for higher LTV products, with searches for interest-only mortgages also increasing by 80% over the month.
Furthermore, even as the deadline for the final applications was brought forward by two months, searches for Help to Buy mortgages climbed by 47% in May.
“The speed at which the market is moving means that advisers have an absolutely critical role to play to ensure that borrowers are aware of the options at their disposal and to guide them towards the right mortgage for their needs,” Beardmore added.
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