Borrowers who remortgaged in September saw their average monthly payment jump by £236, according to LMS.
The conveyancing services firm’s Monthly Remortgage Snapshot adds that 50% of borrowers increased their loan size last month to an average of £21,933.
The average remortgage loan amount in London and the South East was £279,689 while the average for the rest of the UK stood at £130,570 putting remortgage loan amounts 72.6% higher in London and the South East than the rest of the country.
The report comes after the ONS reported that inflation hit 10.1% in September. The Bank of England has lifted the base rate eight times since December from a historic low of 0.1%, with today’s increase taking it to 3%.
The remortgage survey says the most popular product in the market was a five-year fixed-rate loan used by 68% of customers, with 29% saying the main aim of remortgaging was to release equity in the property.
LMS chief executive Nick Chadbourne says: “Mortgages still looking strong in September despite a month of many changes. There is no doubt that this is a stressful time for borrowers as they experience upwards pressure on their mortgage payments, but the end of September is traditionally a big time for early repayment charge (ERC) expiries.”
“This typically means a drop in completions and a swell in pipelines as firms get ready to process these cases on the 1 October. The market volatility caused by the mini-budget also saw instructions drop as lenders immediately withdrew products, so all in all, the statistics show what we would expect.”
“With the ERC expiry date and the fact that those lucky enough to secure a rate before the budget will see their cases flow through to completion, we expect completions to pick up in October, but it will also likely be a month of anomalies as the ongoing economic instability and changing policy will cause lenders to enter and leave the market with various products as appropriate.”
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