The number of people remortgaging on to five-year fixes remains high ahead of a potential increase in interest rates.
Almost half - 48% - of remortgagers opted for a five-year fixed deal in April, according to conveyancing service provider LMS.
The percentage of remortgagers fixing for five-years has now grown from 45% in March, with the data suggesting that the anticipation of an interest rate increase is driving this surge.
In total 97% of remortgaging borrowers, including the vast majorly of buy-to-let landlords, opted for a fixed rate deal, with LMS noting that 61% of borrowers expected a base rate rise in the next 12 months.
Almost half – 46% - of borrowers moving to a new deal saw the size of their repayments drop as a consequence. On average these borrowers are repaying £206 less each month as a result.
But 45% are facing larger repayments after remortgaging, on average by £198 a month.
According to LMS, the average remortgage amount now stands at £171,622, with large regional differences.
In London, for instance, the average remortgage is £324,983, while in Northern Ireland it drops to £106,692.
Nick Chadbourne, chief executive officer of LMS, commented: “Borrowers are taking control of their monthly payments and locking into longer term fixed rate deals, with nearly half opting for a five-year fixed rate product. This trend carries on from March, where 45% of borrowers selected this fixed term.
“It’s also great to see that 65% of borrowers decided to remortgage using the guidance of a broker, highlighting the importance of advice in the remortgage process.
“Another interesting observation is that 48% of borrowers chose to increase their loan size by taking advantage of the competitive rates available.
“This gives borrowers the flexibility to alter their monthly repayments and use the additional funding on home improvements, as we are seeing many choose to ‘improve not move’.”
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