Borrowers who remortgaged in December saw their average monthly payment jump by £240, according to LMS, as new instructions fell by 49% largely in line with seasonal expectations.
The conveyancing services firm’s Monthly Remortgage Snapshot adds that 43% of borrowers increased their loan size last month, leaving the average remortgage loan size standing at 197,746.
In London and the South East, the average remortgage loan amount was £301,303, while the average for the rest of the UK stood at £151,254 putting remortgage loan amounts 99% higher in London and the South East than the rest of the country.
The study points out that apart from lower new instructions last month, there were 17% fewer remortgages completed in December, while pipeline cases fell 10% month on month.
The most popular product in the market was a five-year fixed-rate loan used by 67% of customers, with 35% saying the main aim of remortgaging was to “gain longer-term security”, the most popular cited reason.
LMS chief executive Nick Chadbourne says: “While all metrics fell in December, this is somewhat unsurprising. The quieter month was both seasonal and down to the fact that the majority of borrowers were holding out to see what the new year would bring.
“Those who did remortgage were looking for longer term security as is evident by over two-thirds of them locking in five-year fixed rates.
Moving forwards, we’re likely to see the market stabilise – the economy will likely steady in 2023 following the political volatility that dominated the last year.
“Mortgage rates are expected to reduce at the beginning of the year before settling back into previous dynamics against the base rate movements.
“Borrowers should therefore expect the first half of 2023 to bring the lowest prices for the foreseeable future and aim to lock these in while they still last.”
