Rate rise anticipation fuels surge in remortgage instructions

Its figures show that pipeline cases increased by 13%, completions rose by 15%, and the overall cancellation rate decreased by 0.37%.

The research found that 67% of remortgagors now expect an interest rate rise within the next year.

Those who remortgaged in October saved an average of £219 a month and 23% of borrowers chose to increase their loan size.

Nick Chadbourne, CEO of LMS, comented: "Despite the Bank of England’s decision to maintain the base rate at 0.1%, our research shows that two thirds (67%) of people expect interest rates to rise within the next year. This, paired with the increase in product rates which came as lenders pre-empted a possible rise, could be part of what fuelled the surge in instructions cases in October, as many borrowers shopped around to lock in the best rate available.

“The number of remortgage completions continue to climb for the second consecutive month due, in part, to the high volume of fixed rate mortgages which expired at the end of September. It’s a promising sign to see the industry efficiently progressing the high levels of pipeline activity.

“Purchase pipelines remain high, and the ending of the stamp duty holiday failed to dampen demand in the home mover market. This, combined with the high levels of ERC expiries due on December 31st and the continued buzz surrounding interest rates, should contribute to busy few months. Those in the industry should ready themselves for this increased activity.”