Almost three quarters of borrowers who remortgaged in April saw their payments jump compared to what they were previously paying, the latest snapshot from LMS reveals.
Nick Chadbourne, CEO of LMS
It found that 71% of remortgage borrowers faced a payment rise, while 22% saw their payments fall.
For those borrowers whose costs increased, the average monthly bill jumped by almost £355.
There were 4% fewer remortgage instructions, but 9% more completions in April than March, according to the research.
Five-year fixed rates were the most popular choice, with 44% opting for these deals, just ahead of the 43% who opted for two-year fixes.
LMS chief executive Nick Chadbourne says: “The key mortgage figures from UK Finance in 2023 showed an increase in product transfers of 17.1% compared to those in 2022 – it is clear that the PT trend has continued into 2024.
“While not as significant as April, we are heading towards another spike [in current deals ending] at the end of July.
“Typically this would mean an increase in remortgage instructions a few months prior; however, as is shown, we have experienced an atypical decrease in remortgage instructions month on month.
“In other news, for the first time since November 2023, five-year fixed product has become the most popular choice amongst customers.
“Our data also shows that 73% of customers’ product choices are motivated by security and wanting to know how much to pay per month.
“Both metrics indicate that a critical driver for borrowers is wanting certainty of mortgage payments over the longer term; although the Bank of England suggests rates will reduce, borrowers are opting for potentially higher payments over a longer term to ensure they have that certainty.”
