Remortgage instructions increased by 73% in May, according to LMS’ Monthly Remortgage Snapshot.

Data showed that there was a 2% decrease in completed remortgages in May, while the overall cancellation rate increased to 5.6%.

LMS chief executive Nick Chadbourne says: “The figures show that there has been a substantial increase in instructions indicating higher consumer demand and increased market activity, as predicted last month.”

The most popular main aim when remortgaging was to lower monthly payments, cited by 26% of borrowers. 

The survey by the conveyancing firm says 44% of borrowers increased their loan sizes in May, with average monthly payments lifting by £207.

It adds that 63% of those who remortgaged took out a five-year fixed-rate product, which was the most popular product in May.

Chadbourne says: “Consumers are looking to make savings in light of the cost of living crisis and further base rate rises, trying to lock in competitive, longer-term fixed rate products ahead of the next ERC date at the end of June.”

“This was also reflected in the way five-year fixed rate products not only remained the most popular product in May, but the amount of people taking them out, compared to other products, was up by nearly 10% from April. This is because, in addition to offering longer-term financial security, many fixed rate products for five or more years are now cheaper than two-year fixed rate products.”

“As such, lenders will try to remain competitive and even consider the possibility of widening their range to include seven-year or ten-year fixed rate products. That said, uncertain economic conditions make affordability much more of a prominent factor. We should expect lenders to become more cautious when it comes to their risk profile, and rightly so,” he adds.