Re-mortgaging homeowners are seeking out lower interest rates and longer fixed deals, according to conveyancing service provider LMS.
Some 32% of homeowners who re-mortgaged in March moved to a five-year fixed deal, despite just one in ten previously having fixed their rate for so long. Figures from LMS show 19% of those re-mortgaging lowered their monthly repayments, while 84% saw their interest rate fall.
But the average mortgage rate has climbed for the first time since September 2016. The average rate was 2.13% in February, up from 2.06% in January – the biggest jump since June 2012. Just 1% of people surveyed by LMS expect rates to fall, while 46% think rates will rise within a year.
Meanwhile, the number of people on a variable rate fell from 19% to 7%. The average mortgage repayment now accounts for 17.3% of a homeowner’s annual salary, down from 18.4% in January.
LMS chief executive Andy Knee says: “Homeowners have sought out cheap prices and long-term security when re-mortgaging. For those who managed to re-mortgage in March, this will be of paramount importance in the months to come.”
Re-mortgaging made up 25% of total lending in March, down from 29% in February. Re-mortgage lending edged up just 1% to £5.26bn in the month.
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