Remortgage activity surged in April, with completions rising by 24% and the overall cancellation rate falling by 3%, according to the latest monthly remortgage reports.

The data also revealed a significant shift in borrowing habits. 42% of those who remortgaged in April increased their loan size, with the average increase reaching £20,555.41. Meanwhile, 34% saw no change in their loan amount, and 24% reduced their loan size, with an average decrease of £14,418.16. Across the board, borrowers who remortgaged experienced an average monthly payment increase of £290.36. Half of all borrowers (50%) opted for a five-year fixed rate product; the most popular choice during the month. Among those surveyed, 29% cited securing lower monthly payments as their main reason for remortgaging. Regional figures show that the average remortgage loan amount in London reached £326.141, while the rest of the UK saw a significantly lower average of £163,320, marking a 100% difference.

Commenting on the findings, LMS chief executive Nick Chadbourne said: “For the first time in two years, half of all borrowers are now opting for five-year fixed rate mortgages. This marks a significant shift in borrower sentiment, highlighting a growing preference for financial stability and long-term certainty, even as market indicators continue to suggest that further interest rate reductions are likely in 2025.”

He added: “This trend suggests that many households are more concerned with shielding themselves from potential volatility than attempting to time the bottom of the rate cycle.”

Looking ahead, Chadbourne expects the strong remortgage trend to continue throughout 2025: “With continued economic uncertainty and fluctuating inflation data, many are likely to favour fixed options, even as expectations for lower rates persist. The balance between market optimism and personal financial caution will remain a key theme in the remortgage landscape for the rest of 2025.” 

Source: David Burrows, Mortgage Strategy