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LMS: Remortgage completions up 108%

The volume of remortgage completions rose by 108% in September, according to the LMS Monthly Remortgage Snapshot.

Instruction volumes also increased, rising by 50% over the same timeframe.

The overall cancellation rate rose by 0.43% to 5% and pipeline cases increased by 7% in last month.

The average monthly payment decrease for those who remortgaged in September was £235.

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A total of 45% of borrowers increased their loan size and 50% of those who remortgaged took out a 5-year fixed rate product, which was the most popular product length.

An estimated 28% of remortgagers’ primary aim when remortgaging was to release equity from their property.

The average loan increase post remortgage was £21,584, whilst the average loan decrease post remortgage was £12,607.

The average remortgage loan amount in London and the South East was £288,939, while the average for the rest of the UK stood at £148,978, putting remortgage loan amounts 48% higher in London and the South East than the rest of the UK.

The longest previous mortgage length was found in the North East at 75.88 months (6.32 years) and the shortest was in East Anglia at 59.92 months (4.99 years), putting the longest previous mortgage term 26.64% longer than the shortest.

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Nick Chadbourne, chief executive of LMS, said: “Remortgage instructions rose by 50% in September as rumours of an interest rate rise loom large, which may impact the cost of mortgages.

“Savvy borrowers nearing the end of their current term, and their brokers, will have anticipated this and have begun to shop around to secure a longer fixed-rate deal to weather any increases in their monthly repayments.

“The number of remortgage completions soared to 108%, as September marked one of the highest numbers of ERC expiries of the year.

“As some lenders will be inundated with cases as a result of the current rate wars, panel managers will have an important role to play in mitigating any mismatch in capacity across the industry, by ensuring that instructions are evenly balanced between firms to maintain service levels.”

By Jake Carter

Source: Mortgage Introducer

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Remortgage completions fall 5% while instructions rise

The volume of remortgage completions fell by 5% in June, according to the LMS Monthly Remortgage Snapshot.

However, while remortgage completions slowed, instruction volumes increased by 16.% over the same timeframe.

The overall cancellation rate decreased by 0.45% to 6.01%, while pipeline cases rose by 11% in June.

The average monthly payment decrease for those who remortgaged was £200, and the average monthly mortgage increase was £261.

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A total of 42% of borrowers increased their loan size and 49% of those who remortgaged took out a 5-year fixed rate product, which was the most popular product length.

More than a third (36%) of remortgagers said their primary aim was to release equity from their property.

The average loan increase post-remortgage was £21,586, whilst the average loan decrease was £12,217.

The average remortgage loan amount in London and the South East was £283,685, while the average for the rest of the UK stood at £143,220; this puts remortgage loan amounts 98% higher in London and the South East than the rest of England and Wales.

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The longest previous mortgage length was found in the North East at 84.36 months (7.03 years) and the shortest was in the West Midlands at 62.59 months (5.2 years), meaning that the longest was 35% longer than the shortest.

Nick Chadbourne said: “Steady activity and easing restrictions continued to improve lender confidence in June which gave borrowers greater product choice and better deals.

“However, instructions were still not as high as we would expect in the lead up to the large number of [early repayment charge (ERC)] expiries in July.

“This means that many borrowers who are remortgaging are opting for a product transfer.

“As low interest rates are still in place across the board, staying with the same lender may give borrowers a cheaper rate than switching, but it is still important that borrowers shop around to ensure they are getting the best deal possible.

“As the purchase market continues to boom, supply is the only factor which might slow it down.

“The end of the stamp duty holiday will have had some impact, but the key drivers to move out of cities, find green space and upsize are all still there to drive demand.

“Until supply is properly addressed, inflated house prices and competitive mortgage rates are expected to stay.

“We expect to see more borrowers opting to stay put in this environment, boosting remortgage activity and contributing to a healthy pipeline in the coming months.”

By Jake Carter

Source: Mortgage Introducer

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LMS: Remortgage completions up 4.7% in March

Remortgage completions volumes rose by 4.7% in March, according to LMS’ Monthly Remortgage Snapshot.

In addition, instruction volumes continued to rise, up 17.2% in January.

The cancellation rate increased by 0.5% to 7.45% in March, and pipeline figures rose by 12.8%.

The average monthly payment decrease for those who remortgaged in January was £238.

A total of 43% of borrowers increased their loan size, and 54% of those who remortgaged took out a 5-year fixed rate product which was the most popular product length.

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The most popular primary aim when remortgaging, at 33%, was to borrow more money.

The average loan increase post remortgage was £22,999, whilst the average loan decrease post remortgage was £15,523.

Nick Chadbourne, chief executive of LMS, said: “Remortgage instructions grew by nearly a quarter in March as the stamp duty holiday extension increased industry capacity by taking pressure off the purchase market.

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“March also brought the market right up to the five year anniversary of 2016’s stamp duty cut for buy-to-let purchasers, which will have contributed to the increase as many landlords begun the remortgage process as their 5-year fixes came to an end.

“These factors are the most likely cause for the pipeline growth as cancellations remained fairly steady.

“The purchase market is likely to retain the lion’s share of mortgage business through Q2 as government support such as the 95% government-backed LTV scheme and SDLT holiday continue to prop up an already busy market, but this balance should shift as the incentives offered by the stamp duty holiday reduce at the end of June.

“Remortgage-focused businesses should prepare for a growth in enquiries but shouldn’t abandon the other business streams which many have explored while purchases were on top – growth at any time should be seized with both hands, but those who are still reliant on old processes will struggle.”

By Jake Carter

Source: Mortgage Introducer

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