Remortgage instructions fell 26% in March as lenders reacted to heightened levels of uncertainty around the cost of living crisis, according to the latest remortgage data from LMS.
The data showed there was also a 28% drop in mortgages completed in March, which was “fully expected” given the spike in prepayment charges (EPC) in early April.
The most popular primary goal when re-mortgizing was to free up equity in the property, cited by 29% of borrowers.
The Land Transfer Company’s survey says 46% of borrowers increased their loan amounts in March, with average monthly payments rising by £224.
He adds that 63% of those who remortgage bought a five-year fixed rate product, which was the most popular product of the month.
LMS Managing Director Nick Chadbourne said: “While the numbers show a drop in completions, this is entirely expected given the ERC’s peak in early April. The fact that the pipeline grew shows you how many cases were waiting for the ERC to withdraw.
“While remortgage instructions are also down month-on-month, this is likely because many lenders reacted to heightened levels of uncertainty around the cost of living squeeze by pulling products from the market and by more closely assessing affordability.”
“They are also building their capacity at all levels – underwriting, survey and transfer of ownership – so it will be vital for the industry to determine how the supply chain can handle sustained volumes throughout the year.”
“Working closely with their suppliers, lenders will seek to support borrowers by offering competitive fixed rates to secure costs while dealing with such pressure, and effective collaboration between all parties will ensure effective implementation. technology that can help speed it all up. mortgage trip,” he adds.