Remortgage instructions increased by around 31% in January, but the overall cancellation rate grew by 49%.
According to LMS’ Remortgage Snapshot, there were 1% fewer remortgages completed in January and the pipeline had stayed stable compared to the previous month.
The most popular product was a five-year fixed rate, at 45%, followed by a two-year fixed rate, at 43%.
Around 30% said they wanted lower repayments when they remortgaged, followed by 23% pointing to releasing equity on property or borrowing more money. Only 20% said they wanted security over monthly payments.
Regarding loan sizes, the report stated that 39% had increased their total loan size, while 36% saw no change. A quarter said they reduced their total loan size.
The average loan increase post-remortgage was pegged at £21,195, while the average loan decrease post-remortgage came to £13,673.
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Looking at monthly loan repayments, 59% increased their monthly repayments, while 12% saw no change in their monthly repayments. Around 29% said they had reduced their monthly payments.
The average monthly payment increase for those who remortgaged in January was around £288.18, while the average decrease was estimated at £354.13.
‘Double bumper year’ for product expiries and 2025 will be year of the remortgage
Nick Chadbourne, LMS’ CEO, said: “The remortgage stats for December and Jan followed the usual trends, with instructions slowing and conveyancers using the new year as an opportunity to clear the pipeline, hence the variation in cancellations.
“However, we know that 2025 is set to experience the highest number of product expiries since the pandemic.”
He attributed the “bumper year” to the pandemic and the mini Budget.
Chadbourne explained: “Think back to 2020, when stamp duty changes had everyone moving to the country; these people took out five-year deals. Then later, in 2023, we experienced a jump in rates due to Ms Truss, which made two-year fixed rates the way to go. Now, in 2025, we will see both the five-year and two-year deals expire, resulting in a double bumper year.
“Thankfully, since the pandemic, we have further embraced automation, implementing it, along with levels of resilience, into our remortgage processing. So, lenders can confidently get on with connecting with customers while knowing that the process is just as slick in the background.”
Looking ahead, Chadbourne said 2025 may well be the “year for remortgages, but also one that will continue to be full of surprises”.
