"With 56% of September’s borrowers fearing an impeding rate rise – a significant increase from the 45% seen in August – anticipation of rate increases is driving this surge."
This is the seventh month in a row that the percentage of remortgagors fixing for five-years has grown – a dramatic change from the 9% of remortgagors who had previously been on this type of mortgage.
The research shows that interest rate fears are causing the surge in demand, with 56% of September’s remortgagors now anticipating an impending rate rise, up from 45% in August. This is in stark contrast to September 2016, when this number was only 14%.
Current low-rates have also made remortgaging more affordable than ever with annual repayments falling to 16.4% of total income – an all-time low.
In September alone, the number of remortgagors increased by 13% to 41,573 from August’s 36,700, while the value of remortgaging increased by 2% to £6.6bn.
Nick Chadbourne, chief executive of LMS, commented: “Over the last month, remortgaging activity has skyrocketed. This activity has been dominated by the five-year fixed deal with 42% of September’s remortgagors opting for this type of mortgage. With 56% of September’s borrowers fearing an impeding rate rise – a significant increase from the 45% seen in August – anticipation of rate increases is driving this surge. With mortgage rates the second-lowest on record, and remortgaging more affordable than ever, borrowers are taking the initiative to lock into these low rates.”
