Drop in remortgage activity continues as economic circumstances increase product transfers

29% less remortgages were completed in November, despite a 1% increase in instructions, and cancellations increased for the third consecutive month, according to the latest data from LMS.

Those who remortgaged in November saw an average monthly payment increase of £421 and 43% of borrowers increased their loan size.

36% of those who remortgaged took out a five-year fixed rate product, the most popular product in November, and 27% said their main aim when remortgaging was to lower their monthly payments, the most popular response.

Nick Chadbourne, CEO at LMS, commented: “Although the contraction of the overall pipeline was not as significant this month compared to October, we are still seeing a drop in remortgage activity. While we saw a marginal increase in instructions, cases did not progress through the journey: 29% fewer remortgages were completed in November and cancellations increased for the third consecutive month. Instead, product transfers have been particularly attractive for borrowers looking for a comparable product, which has only exacerbated what is always a time of reduced activity over the festive period.

“All of that said, swap rates are dropping which may be a sign of a further drop in inflation on the horizon. Lenders are being more competitive with pricing as they start to look towards 2024, especially as house prices are also falling. This is giving rise to additional borrowing requirements or changes in terms, or both, which naturally are more conducive to a full remortgage so we expect the pipeline to pick up at the start of the new year.”