In September, as the then Brexit deadline of 31 October drew closer, homeowners showed strong demand for remortgages. This was the month prior to the large influx of remortgaging homeowners that were expected due to a high of two year mortgage deals ending in October 2019. Borrowers took advantage of the competitive market in lending that existed in September to secure fixed rate remortgages and gain peace of mind from the Brexit uncertainty.

The most popular low interest rate remortgage among borrowers was the two year fix according to research from LMS. Five year fixed rate remortgages declined to 43% from 48%, and two year fixed rate remortgages increased from 35% to 42%.

In a poll of borrowers, 55% believed that interest rates will increase within the next 12 months and therefore the cost of borrowing will be more expensive this time next year. Of those that did not expect an increase, 28% think that a rate boost is more than one year away and 17% believe there will not be any change in the next 12 months.

Nick Chadbourne, CEO of LMS, remarked, “Healthy competition between lenders combined with increased levels of consumer appetite resulted in a surge of two-year fixes in September. The market is experiencing record-breaking rates when it comes to two-year fixed products and with the advice of brokers, consumers are realising the immediate benefits of these products outweigh any potential risks.

“Moving forwards, we expect to see the market segment further as consumers continue to act according to their personal circumstances rather than wider trends. Potential interest rate movements may cause a change, but industry opinion remains split on this. The one thing we can predict with certainty is that variable rate products remain off the table for the vast majority of borrowers.”