Remortgaging homeowners are taking advantage of the very low interest rates and are choosing to take out long term fixed rate deals. Doing so locks in the low interest rate for the term of the remortgage and assures that the savings will last despite any threats of rising rates during the length of the deal. According to LMS, more than one half of homeowners that remortgaged in January chose a five year fixed rate remortgage.

Thirty-six per cent of the deals were for two-year fixed rates and only two per cent were ten-year remortgage deals. Fixed rates were the top choice as tracker remortgages made up only one per cent of the deals in January.

The opportunity to save money offered an average savings of £212 a month.

Almost half of the homeowners increased their loan size when they remortgaged. Releasing equity into cash and increasing the loan size was a top priority for almost one-third of the borrowers. The average increase was £22,231.

The remortgage instruction volumes increased by 19% in January and completion volumes grew by 6% month on month. The average remortgage was £143,123 inside England and Wales, and it increased to £264,371 inside London and in the South East.

Nick Chadbourne, the Chief Executive of LMS, remarked, “The steadying market is already having a positive impact on remortgage activity as industry capacity returns to normal levels and stakeholders have the necessary time to process remortgage cases at healthy rates.

“We can expect an incredibly busy next few months in both the purchase and remortgage markets which may run into early summer given the current turnaround times.

“Covid-19 has forced homeowners to re-evaluate their priorities in terms of space, location and accessibility, and these factors will continue to buoy the purchase market for months to come, and likely impact remortgage decisions, too. However, the easing of social distancing measures will allow more staff to return to offices and give the industry the necessary resources and tools to process.”