The average remortgage loan amount has also dropped to £149,715, the lowest amount in a year.
The average remortgage loan amount varies considerably across UK regions and is broadly in line with the average house prices in these areas.
London had the largest average remortgage value in September of £239,873: significantly more than the £99,362 recorded in Wales. London also had the lowest LTV (47%), a drop of 5% from last month, while the North East had the highest LTV at 68%.
Regional fluctuations in the average LTV remained largely similar to last month, with the exception of the West Midlands, which saw a decrease from 62% to 56%. The North West, London and Wales all saw decreases of 5%. Overall, LTVs appear lower in October than in September, with only two out of the 10 regions falling (East Midlands, the South West and Wales).
Regional variations in the frequency of remortgaging remain reasonably small ranging from 4.64 years in London to 5.31 in the North East. This is fairly similar from last month when terms ranged from 4.50 to 5.59 although the variations have decreased slightly.
The average remortgage interest rate increased to 3.22% in September, the highest rate since June 2013 and the fifth consecutive rise.
The average monthly household income for all new mortgages fell by 0.8% in September, to an average income of £45,627 according to the CML. September’s average income is, however, 6% higher than this time last year.
Based on this, annual remortgage repayments account for more than a fifth (20.5%) of household income, higher than last month when they accounted for 19.9%. This remains lower than the typical rate for a new purchase mortgage, which has a rate of currently 22.0% but compared to last month, the gap between the two has narrowed.
Commenting on the latest figures, Andy Knee, Chief Executive of LMS says:
"Despite signs of resurgence in the market last month that remortgaging had taken a turn for the better, this month saw that assumption come crumbling down with the worst October we’ve experienced since during the midst of the recession."
"Even with the competitive rates on offer, customers appear hesitant to take advantage of these perhaps, in part, due to the increased regulation of MMR or the introduction of loan to income (LTI) caps."
"Recent months have witnessed evidence of a wider cooling in the market as house price growth and loan approvals slow but it awaits to be seen whether this is a permanent trend, or simply a slowdown in the lead up to Christmas."
"Hopes for greater stability in 2015 across the remortgage market are likely to be thrown off course by uncertainty ahead of the election, changing attitudes towards a base rate rise from the Bank of England and, potentially, the impact of greater economic instability in the Eurozone on the UK market."
"That income has dropped slightly this month, after several months of increases, and repayment as a percentage of income has increased slightly is a worrying sign this close to Christmas. It is a time of year when finances face increasing pressure. Remortgaging to reduce your monthly payments by taking advantage of the competitive offers available at the moment could provide some welcome relief."
