In an attempt to better quantify the remortgage market, LMS has launched an index to report and analyze remortgaging data to those in the industry, experts interested in such data, and for the lay person since the report is made public. In a partnership with the Centre of Economics and Business Research (CEBR), the report will reveal the overall health of the remortgage market while tracking four strong indicators which are: the volume of remortgage approvals, the remortgage borrowing cost, homeowner equity value, and consumer sentiment.

Named the LMS Remortgage Healthcheck, the data will give an overall glimpse into how remortgage activity is performing as well as consumer spending and habits. Each indicator in the data collected will be assigned a score between 0 and 100. Those scores between 40 and 60 will be considered neutral, while below 40 will be considered negative, and over 60 will be considered positive for the remortgage industry. An overall score will be calculated from the average of each indicator score.

In the second quarter, there was an overall decline from the first quarter of 2019. The average score of the overall indicators dropped by 2 points from 51.3 to 49.3, but still remained in the neutral zone.

Individual indicator scores for the second quarter of the year were: Remortgage approvals 42.6, borrowing costs 46.6, homeowner equity 52.6, and consumer equity 57.0. All indicator scores were neutral.

Nick Chadbourne, CEO at LMS, remarked, “Despite the current climate, the wider mortgage market is still being supported by remortgage activity with existing homeowners choosing to take equity from their home.

“Although many people naturally remortgage each time their current fix comes to an end, others choose not to do so. Yet with mortgage lenders offering cut-price deals to existing homeowners we have seen even more customers coming to the market, and a healthy proportion increasing their loan size.

“In Q2 more than nine out of 10 borrowers (96%) opted for a fixed rate mortgage. Of those that chose this option, 70% wanted certainty over their monthly payments, while 18% were worried about the economic climate and wanted to lock in a good rate.

“These low rates mean that people can potentially save hundreds or even thousands of pounds each year by switching. It is interesting that few homeowners wanted to stay loyal to their existing lender, as this shows that banks can do more to keep their current customers happy.”