Remortgage Instructions Increase by 35% in October as Buyers Prepare for Rates Rise
With the anticipated rise in interest rates looming, more and more home owners are opting to remortgage their properties, with 67% of people remortgaging their homes expecting a significant interest rate rise within the next twelve months.
The end of the stamp duty tax break has, however, done little to decrease the interest in the home mover market.
LMC has released figures showing remortgage instructions currently in the pipeline have increased by 13%, while completions rose by 15% with the total cancellation rate dropping by 0.37%.
The report shows that home owners who remortgaged in October saved an average of £219 per calendar month, with 23% of borrowers opting to increase the size of their loan.
CEO of LMS, Nick Chadbourne, commented: “Despite the Bank of England’s decision to maintain the base rate at 0.1%, our research shows that two thirds (67%) of people expect interest rates to rise within the next year. This, paired with the increase in product rates which came as lenders pre-empted a possible rise, could be part of what fuelled the surge in instructed cases in October, as many borrowers shopped around to lock in the best rate available.
“The number of remortgage completions continue to climb for the second consecutive month due, in part, to the high volume of fixed rate mortgages which expired at the end of September. It’s a promising sign to see the industry efficiently progressing the high levels of pipeline activity.
“Purchase pipelines remain high, and the ending of the stamp duty holiday failed to dampen demand in the home mover market. This, combined with the high levels of ERC expiries due on December 31st and the continued buzz surrounding interest rates, should contribute to busy few months. Those in the industry should ready themselves for this increased activity.”