Snapshot shows mortgages cost an extra £300 per month - LMS

LMS’ Monthly Remortgage Snapshot for April  showed £300 increases for remortgagers last month.

Key findings:

• £300 average monthly payment increase for those who remortgaged in April
• 37% of borrowers increased their loan size in April
• 51% of those who remortgaged took out a 5-year fixed rate product, the most popular product in April
• 27% said their main aim when remortgaging was to lower their monthly payments, the most popular response.

“The anticipated Easter lull was primarily responsible for pushing down instruction and pipeline figures,” said LMS CEO Nick Chadbourne.

Bide their time

“These seasonal trends always play a part in market activity, although we expect that there are also increasing numbers of borrowers opting for product transfers instead of remortgages amid the affordability squeeze.

“With borrowers primarily focused on lowering their monthly payments, many are also more inclined to bide their time and wait for better products to become available.

“However, we’re expecting instructions and the pipeline to increase again in May. With the Bank of England raising the base rate to 4.5%, more of those who are on trackers or SVRs will look to switch to a more competitive fixed rate product and the introduction of innovative products such as Skipton’s 100% mortgage will only encourage this further.

“Aside from that, lenders are generally relaxing their affordability criteria thanks to there being more economic certainty and confidence in employment and house prices, playing into the prediction of an increased pipeline.”