Two-thirds of borrowers opt for five-year fixes in February
Six in 10 (62%) of borrowers chose to fix their mortgage for five years when refinancing in February, dwarfing the 30% who chose a two-year fixed product.
According to the LMS Monthly Remortgage Snapshot, some 65% of those choosing a fixed rate said they were motivated by getting security over monthly payments, with 25% saying they were acting in response to the unstable economy.
The conveyancer’s report covered market activity through February 2022. It showed that 42% of borrowers had increased their loan size, but 28% were remortgaging to lower their monthly payments in the face of the rising cost of living.
However, the average remortgage amount hasn’t budged, remaining at £211,963.
There were 51% more remortgage instructions during the month compared to Janaury, indicating a significant rise in activity. Additionally, 23% more remortgages were completed in February.
There is a 20% gap between the shortest terms in East Anglia, at 52.87 months, and the longest, in the North East at 63.53 months.
Nick Chadbourne, CEO at LMS, said: “February has seen an uptick in remortgaging activity with almost 25% more completions compared to January. Activity will almost certainly remain very high throughout March with the next big early repayment charge (ERC) date – 1 April – fast approaching and the fact that lenders are pulling products from the market due to the heightened level of uncertainty and making borrowers make increasingly frenzied decisions.
“Processing requests quickly and efficiently will be key in keeping borrowers happy while dealing with the high levels of remortgage activity which is predicted to remain throughout 2022.”