"We will see this trend continue into H2 with over half a million borrowers nearing the end of their current mortgage term."
Remortgage instructions increased by 24% in June as the month saw a spike in completions alongside rising rates, the latest data from LMS shows.
This month's update shows that 0.2% more remortgages completed in June and pipeline cases increased by 8% month-on-month
Those who remortgaged in June saw an average monthly payment increase of £292 and 48% of borrowers chose to increase their loan size.
46% of those who remortgaged took out a five-year fixed rate product and 26% said their main aim when remortgaging was to lower their monthly payments, the most popular response.
Nick Chadbourne, CEO at LMS, commented: “Since it’s the end of the second quarter, June always sees a spike in remortgage completions. Instructions also rose because borrowers are now confident that rates won’t be falling in the foreseeable future, so they are looking to secure a product now before they potentially increase along with the expected base rate trajectory.
"We will see this trend continue into H2 with over half a million borrowers nearing the end of their current mortgage term. The challenge is affordability – even with stress tests a thing of the past, banks will be wrestling with this, especially as the Consumer Duty comes into effect. Rising rates create challenges for banks looking to onboard new customers – products continue to change rapidly and many continue to opt for product transfers. However, shopping around with the help of a broker is critical in such an environment so borrowers would be well advised to do so to get the best possible deal.”
