"2019 brought healthy remortgage volumes thanks to enticingly low interest rates, delivering a steady market over the year."
96% of those who remortgaged throughout 2019 did so with a fixed-rate product, with five-year fixed rates the most popular product.
45% of borrowers opted for a five-year fixed rate in January, ending in December on 47%.
Two-year fixed rate deals followed the same pattern, starting on 37% and finishing 2019 on 38%.
LMS saw a small hike in borrowers opting for shorter-term fixes in September, however levels smoothed off as 2019 drew to a close.
Nick Chadbourne, CEO of LMS, commented: “2019 brought healthy remortgage volumes thanks to enticingly low interest rates, delivering a steady market over the year. After a particularly strong January, we saw a 10% increase in remortgage volumes from February to December. It’s also positive to see that 67% of borrowers engaged with a broker during their remortgage, showing the value consumers still place on advice.
“Fixed-rate products were hugely popular across the whole of 2019, with 96% of borrowers choosing this type of deal and 5-year terms leading the way. This comes as no surprise given that 2019 was a particularly uncertain period both politically and economically. Homeowners have been locking into low rates while they can to secure some certainty for their own personal finances.
“It’s uncertain how the remortgage market will evolve as we move into 2020. Product expiries for the year look set to mirror 2019, so we can expect similar volumes throughout 2020, but we may see a flat H1 as the home moving market picks up. Product choices might change too, as borrowers could opt for shorter-term fixes as fears of a base rate increase subside. The growth in product transfer rates will also be a key factor, so it’ll be interesting to see how newer entrants shape their offerings to compete – ERC-free products, the removal of LTV bandings, and an increase in digital-only products are all possible.”
