The conveyancing services firm found that borrowers who remortgaged in January saw their average monthly payment jump by £239.
Data shows that 36% of borrowers increase their loan size last month, leaving the average remortgage loan size in the UK standing at £206,532.
In London and the South East, the average remortgage loan amount was £306,943, while the average for the rest of the UK stood at £156,659 putting remortgage loan amounts 96% higher in London and the South East than the rest of the country.
The most popular product in the market was a five-year fixed-rate loan used by 63% of customers, with 37% saying the main aim of remortgaging was to “gain longer-term security”.
LMS chief executive Nick Chadbourne says: “As predicted at the end of last year, there was a spike in instructions for January. This is the case every year since December instructions are always seasonably low, but this year’s figures are higher than January 2022, showing that those who were holding out for better rates are starting to return to the market.”
“As appears to be an increasing trend, those who remortgaged in January were primarily seeking to attain longer-term security with nearly two-thirds opting for five-year fixed rates, which continues to be the most popular product. With the increased completion rates following the festive period, the pipeline contracted but this was to be expected.”
“Moving forwards, increased market activity is likely to continue with mortgage rates falling below 4% for the first time since September. This is despite the repeated Bank of England interest rate rises as these have already been priced into the market.”
“As such, we expect to see instructions and the pipeline grow over the next few weeks as well as a rise in cancellations since borrowers who secured rates in December may well reapply at these more attractive rates.”
