Remortgage lending had already been dominating the mortgage lending market. Despite buyers still showing demand for property, the strongest demand was not for home buyer mortgages, but rather from homeowners looking to secure a new deal. Not surprisingly, among the remortgaging homeowners there were many seeking a fixed interest rate deal.

The fact that the Bank of England’s Monetary Policy Committee (MPC) increased the standard base interest rate at the start of the month there is an expectation that there will be even stronger demand for remortgaging, and perhaps even a rush to remortgage which could boost the lending market.

Saving money and securing a low interest rate are likely to be the top reasons for homeowners securing a remortgage deal. However, there are other benefits as well as other reasons for a remortgage, and while interest rates are expected to increase with new deals hitting the market, the reason for particular homeowners to remortgage could be quite varied.

Nick Chadbourne, Chief Executive of LMS, remarked, “While most borrowers remortgage to switch deals or save money, we have seen an increase in remortgaging for different reasons this month, including homeowners remortgaging due to divorce or to pay off debts.

“As divorce becomes simpler through innovations such as the Government’s new online divorce system, so too is remortgaging. This may well be contributing to the use of remortgaging as a vehicle to raise fund for divorce settlements.”

He added, “In almost all cases customers are looking for an efficient process that delivers against both speed and value. A fees assisted remortgage is the most appropriate vehicle, developed and refined for this process. It offers both customers and lenders great value and an efficient legal platform to make the switch.

“Demand for five year fixed rate remortgages remains historically high as borrowers look to protect themselves from a potential base rate increase later in the year. While the popularity of five year deals has dipped slightly month on month, they continue to dominate the market as borrowers lock in current rates for the long term.

“Lenders are operating in a competitive landscape, given the volume of different five year fixed rate products available. Borrowers may wish to consult a broker to ensure they get the best deal to suit individual requirements.”