According to the figures, the volume of remortgages rose to 53,141 in August, up from 52,869 in July.
Purchases of five-year fixes dropped from 50% to 48%, while there was a slight increase two-year fixes from 34% to 35%. 10-year fixes are yet to rise in popularity, with the figure for August holding steady at 5%.
Nearly two thirds of borrowers surveyed by LMS said they expect interest rates to rise within the next year, despite reports that wider economic conditions could cause base rates to fall. 59% predict a rise at some point in the next 12 months, while 27% think this will be more than a year away, and 14% don’t expect a change at all.
LMS says lenders could begin to raise product rates to protect against economic turbulence.
Nick Chadbourne, CEO of LMS, commented: “With a significant peak in early redemption charge expiries on the horizon for October, we’re expecting a steady ramp up in remortgage activity over the next few months. Volumes are already up month-on-month and this trend should continue in Q4 as remortgaging continues to outperform other areas of the market.
Product purchasing levels remain consistent, but we do expect 10-year fixes to become increasingly popular in line with the current industry activity we are seeing. Borrowers are looking for certainty over their personal finances, and longer-term mortgage deals can provide this. There is a trade-off, however in some instances borrowers can expect to pay around 10% more per month for a 10-year fixed product compared to a five-year product.”
