LMS 2019 Remortgage Snapshot report found that 96% of remortgaging was onto fixed rates with five-year fixes the most popular product in 2019 accounting for 46% of business.
The end of year rolling average loan amount was up 2.3% to £178,613 and a larger number of people increased both their loan amount and the size of their mortgage.
Remortgage loan size
- 44% increased their total loan size and the average increase was £20,400
- 34% saw no change in their total loan size
- 22% reduced their total loan size and the average decrease was £11,524
Monthly loan repayments
- 44% increased their monthly remortgage repayments and the average increase £188
- 18% saw no change in their monthly remortgage repayments
- 38% reduced their monthly remortgage repayments by an average decrease of £181
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 five-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.”
