A recent mortgage index revealed that while remortgages remained in higher demand in March than one year ago, the level had retreated back slightly from what was reported in February. The National Mortgage Index (NMI) from the Mortgage Advice Bureau and Coreco Group for March showed that remortgage applications had declined slightly by 1.9 per cent. The applications when compared to March of 2010 showed an increase of 31.9 per cent.

Fixed rate mortgages and remortgages were again the most popular as in February. The trend is due to borrowers choosing to secure a set rate before there is a hike in the interest rate. Most forecasts have called for a rate change in either May or August. According to the data for March from the NMI, 80 per cent of all mortgage applications were for a fixed rate.

The average loan to value on mortgage applications dropped in March to 69.9 per cent from 71.4 per cent in February.

Brian Murphy, Head of lending at the Mortgage Advice Bureau, responded to the recent data by saying, "March figures are encouraging and continue the positive start to the year with another month on month increase in borrower activity. We may well see remortgage transactions dropping off further in April with inflationary pressures easing, making it less likely that we will see a rate rise before the summer."

Some, like Mr. Murphy, believe that remortgages are likely to level off and demand will drop as the warnings for an interest rate increase extend past the May forecast to after the second quarter. There are others however that expect remortgaging to remain strong as more revert to their lender’s standard variable rate and seek to get their own fixed rate deal.