"With a positive start to the year, mortgage rates are currently lower than they were a year ago, leading to a further boost to consumer sentiment."
- Nick Chadbourne, CEO at LMS
Remortgage instructions fell by 13% in February and 31% less remortgages completed during the month, but pipeline cases increased by 4% month-on-month amidst a more stable rate environment, according to the latest figures from LMS.
Two-year fixed rate options remained the most popular product in February, with 47% opting for these short-term deals and 29% noting a desire to lower their monthly payments as their primary motivation.
Overall in February, 43% increased their total loan size, 22% reduced their loan size and the remaining 35% saw no change.
Nick Chadbourne, CEO at LMS, said: “The market may appear to be volatile in terms of rate moves, with some lenders quickly shifting pricing, however from a borrower's perspective rates are relatively stable and have been for some time. While the media often like to announce when large lenders increase or decrease rates, the reality is that rates are likely to remain stable for the foreseeable future. This stability should provide confidence for those looking to remortgage or move home. While this is the case, shorter-term fixed rate options, notably the two-year fixed rate product, remain highly attractive to remortgagers. Almost half opted for these short-term deals in February, with 29% noting a desire to lower their monthly payments as their primary motivation.
"These short-term deals offer homeowners flexibility, allowing them to adapt to changing market conditions and seize better opportunities in the short-term. With a positive start to the year, mortgage rates are currently lower than they were a year ago, leading to a further boost to consumer sentiment. Nine out of twelve regions across the UK have witnessed decreases in their average remortgage amounts, suggesting a trend towards stabilisation and recovery in the mortgage industry leading into Q2. Additionally, there has been a 4% increase in remortgaging cases, indicating that more homeowners are taking proactive steps to find a new mortgage rate.”
