The amount of remortgage activity taking place during the last several months has been quite impressive, and conditions have supported such behaviour. House owners are finding attractive deals with most lenders and have been finding them for months. Low interest rates and the ability to obtain a longer fixed rate term length mortgage loan have been an easy choice to make for many. May proved once again that conditions were right to remortgage by posting a large gain in approvals.

During the month of May, remortgage transactions increased 8% over the month prior. The official tally was 31,936 transactions in May compared with only 29,300 during the month of April, according to data from LMS. Those in search of a remortgage also found lower rates in May as the average interest rate for products fell from 2.1% to 2.0%.

Many home owners looked to reduce payments, but surprisingly only 15% indicated a reduction in mortgage payment was the goal of a remortgage. This is slightly less than the 17% in April.

Andy Knee, chief executive of LMS, commented on the latest data to surface, saying: “Pollsters and the public had predicted a solid election result of a 100+ seat majority for the Conservative Party and continuity at the heart of government. Pre-election confidence was the main driver behind the increase in the number of remortgage transactions. Remortgagors were so confident that the outcome of the snap election would provide stability that over half said they expected low rates to remain in place for at least the next year.”

Knee added: “Not everyone was confident that the election would give us a strong and stable government. While YouGov was a lone pollster predicting a hung parliament, equally, there was a small minority of homeowners who provisioned against a period of economic uncertainty, remortgaging to reduce the amount of debt held with their lender. They opted for caution ahead of risk and protected their most prized asset. Given the shock result, they look pretty smart.”