The latest Remortgage Snapshot from LMS reveals a £281.90 average monthly payment increase for those who remortgaged in December.
The report also shows that 43% of borrowers increased their loan size in December; 36% saw no change in total loan size and 21% reduced their loan size. And 46% of those who remortgaged took out a two-year fixed rate product, the most popular product last month.
Some 27% said their main aim when remortgaging was to lower monthly payments.
Average loan increase post remortgage was £21,589; while the average loan decrease post remortgage was £12,419.
The report also shows that 59% increased their monthly remortgage repayments; 11% saw no change in their monthly remortgage repayments and 30% reduced their monthly remortgage payments.
The average remortgage loan amount in London was £364,213, while the average for the rest of the UK stood at £176,776 making remortgage loan amounts 106% higher in London than in the rest of the country.
Commenting on the latest figures LMS’s chief executive Nick Chadbourne said: “All signs have been positive through the back end of 2024; the home-mover market has been buoyant, and remortgages bounced back towards the end of the year. However, has the new government stifled this positive outlook with their fiscal policies? Due to the changes with employer National Insurance (NI) and reversal of stamp duty, are we in store for another year of turmoil for the housing market?”
He added: “This time last year, financial markets factored in six cuts to base rates – we only saw two, and even up to just a few weeks ago, the expectation was three in 2025. At the time of writing, there’s concern over stagflation in the UK, and many experts are now only pricing in one rate cut this year.”
Chadbourne remains positive though: “Whilst economic policy is mostly inflationary, we still have the base rate above inflation, and if history is a guide, this means we are in line for cuts. So, the beginning of 2025 isn’t completely devoid of hope, with the 1.9m coming off fixed rates promising good deals to jump onto.”