Mortgage instructions rose 73% in May, according to LMS Monthly Mortgage Snapshot.
The data showed there was a 2% decrease in completed mortgages in May, while the overall cancellation rate increased to 5.6%.
LMS Managing Director Nick Chadbourne said: “The numbers show there has been a substantial increase in instructions indicating increased consumer demand and increased market activity, as expected last month.
The most popular primary goal when remortgaging was to lower monthly payments, cited by 26% of borrowers.
The Land Transfer Society’s survey says 44% of borrowers increased their loan amounts in May, with average monthly payments rising by £207.
He adds that 63% of those who remortgage took out a five-year fixed rate product, which was the most popular product in May.
Chadbourne says: “Consumers are looking to save money in light of the cost of living crisis and further base rate hikes, trying to lock in competitive longer term fixed rate products ahead of the next market date. the ERC at the end of June.”
“It was also reflected in the way five-year fixed rate products not only remained the most popular product in May, but the number of people who subscribed to them, compared to other products, increased almost 10% compared to April. Indeed, in addition to providing longer-term financial security, many five-year or longer fixed-rate products are now cheaper than two-year fixed-rate products.
“So lenders will try to stay competitive and even consider the possibility of expanding their range to include seven-year or ten-year fixed rate products. That said, uncertain economic conditions make affordability a much more important factor. We should expect lenders to become more cautious about their risk profile, and rightly so,” he adds.