A recent report on remortgage data from LMS has revealed what experts have pointed out to homeowners, and that is savings are to be found. According to the Monthly Remortgage Snapshot report for September, the average repayments of homeowners securing a remortgage declined by £200.76 per month. Over the course of remortgage term, that is a large savings to ease the financial strains of the pandemic.

In addition to the savings report on remortgaging homeowners, there was a report from Halifax that revealed house prices rose at the end of the third quarter. The increase in September rose at the fastest pace seen in four years. The higher demand in the housing market was thought to be due to home movers out numbering the supply of properties, which in turn pushed up pricing. Homeowners will be benefitting with rising prices as they seek remortgages as it will impact their LTV level and the amount of equity available to turn into cash.

Nick Chadbourne, CEO of LMS, commented on the data revealing that homeowners are increasing the size of their loans. He said, “While we are seeing many remortgagers increase their loans, potentially for home improvements, it appears many more are looking to move to a new home, and prices have been driven up accordingly.”

There have been many reports in the news backing up his thoughts. Homeowners are turning their built up equity into cash with remortgaging for the opportunity to improve and upgrade their home and in turn adding value to the property. Other reports theorized the increase in home movers is due to so many staying at home more due to the pandemic and looking to find a home to better fit their quarantine needs.

Mr. Chadbourne remarked on the coming winter months and the expectations for the remortgage market, saying, “It’s unlikely that the housing market will remain immune to the tough external factors, and the stamp duty holiday granted by the government is likely to be a significant factor in increased recent activity.

“Though we are expecting the balance to shift back towards remortgaging, in part down to the expected surge in early repayment charges at the end of the year, we will also see two spikes in the home moving market, which will have a negative impact on remortgaging.

“The first will be just before Christmas, as borrowers look to move before the holidays, and the second will be at the end of March when the stamp duty exemption comes to an end. At both of these times lender and broker capacity to handle full remortgage cases will be extremely stretched, so we will likely see far more remortgagers reverting to product transfers.

“It’s also likely we’ll see a change in the pattern of remortgage instructions as the increasing number of movers stop worrying about changing their current mortgage deal. This will create a slowdown, partly because of the dominance of five-year fixes in recent years.”