Number of remortgages falls for March, but LMS expect this to be temporary

Lower remortgage activity last month can be attributed to fewer remortgage products on the market.

Compared to February’s figures, the number of remortgages in March fell 28%, according to the latest LMS Monthly Remortgage Snapshot.

However, lenders and borrowers can expect this statistic to be a temporary observation due to a drop in product availability.

“While remortgage instructions are also down month-on-month, this is most likely because many lenders have responded to heightened levels of uncertainty around the cost of living squeeze by pulling products from the market and evaluating affordability more closely,” said Nick Chadbourne, CEO at LMS.

“They are also establishing what capacity they have across the board – underwriting, surveying and conveyancing – so it will be vital for the sector to work out how the supply chain can manage sustained volumes throughout the year,” he explained.

According to Moneyfacts data, the product count for mortgage products across the board took a hit at the start of March.

The total product count stood at 4,838, exactly 558 fewer than the number available at the beginning of February.

While this is the biggest month-on-month drop of the year so far, product availability is slowly creeping up again.

On 1 April, this figure stood at 4,925, an increase of 87 products from one month prior.

Since the beginning of the month the choice in products increased at a much faster rate. Today, the total product count stands at 5,042, a 117-product increase.

When asked why they were remortgaging, 29% of people surveyed said it was to lower their monthly payments, a 5% increase from the previous LMS Monthly Remortgage Snapshot.

In addition to this, 18% of those surveyed were remortgaging to lock in a better deal for the future, a 6% drop from the last report.

These reasons are certainly valid with average mortgage rates only on the rise since the beginning of the year.

Like last month, five-year fixes were the most popular choice among those surveyed. Our data shows that the average rate for these products across all loan-to-value tiers stands at 3.08% today. In comparison, this number was 2.66% on New Year’s Day.

Two-year fixes were the next popular product for remortgage customers. Today the average rate for these products, across all loan-to-value tiers, is 2.95%, a 0.57% increase from 1 January.