Borrowers who remortgaged in October saw their average monthly payment jump by £247, according to LMS.
The conveyancing services firm’s Monthly Remortgage Snapshot adds that 44% of borrowers increased their loan size last month to an average of £20,791.
The average remortgage loan amount in London and the South East was £332,937, while the average for the rest of the UK stood at £156,169 putting remortgage loan amounts 113% higher in London and the South East than the rest of the country.
The report comes after chancellor Jeremy Hunt calmed international debt markets in October, by largely reversing former chancellor Kwasi Kwarteng’s tax-cutting mini-budget on 23 September, which saw the number of products on the market fall sharply while remaining loan prices jumped. The new chancellor’s measures were further consolidated in the November Autumn Statement.
The study points out there were 35% more remortgages completed in October, new instructions edged 0.27% higher, while the remortgage pipeline fell by 2% compared to the previous month.
The most popular product in the market was a five-year fixed-rate loan used by 65% of customers, with 33% saying the main aim of remortgaging was to “gain longer-term security”, which was the most popular reason.
LMS chief executive Nick Chadbourne says: “October saw a big increase in completions as people looked to lock in the products they secured before any potential rate change causes them to be withdrawn.
“For those who had yet to start the remortgage process, the marginal increase in instructions makes it clear that they were waiting to see what November brought before instructing, especially as it would be a big month with both the interest rate decision and the Autumn Budget.
“Although product rates are slowly coming down, they are still out of kilter with standard variable rates.
“As such, some borrowers might wait and see if rates will fall in January before remortgaging because there seems to be little danger of dropping onto a less favourable rate.
“However, this approach comes with an element of risk in that there is no guarantee that swap rates and therefore product rates won’t increase again.
“The most proactive of borrowers will look to instruct sooner rather than later to mitigate this, and so we expect instructions to rise ahead of the next big early repayment charge expiry date at the end of the year.”