Remortgagors fear rate rise

Remortgagors fear rate rise

The number of remortgagors fearing a rate rise has increased dramatically over the past 12 months.

Analysis by conveyancing service provider LMS revealed the number of people remortgaging who feared a rate rise climbed by 66 per cent, from 6,500 in December 2015 to 10,800 in December 2016.

Another factor behind the increase in remortgage activity is a rise in the number of people looking to lower their monthly outgoings, the analysis showed.

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The number of people who said they were looking to reduce their monthly outgoings by remortgaging jumped by 14 per cent in the year from December 2015.

Price was by far the most important factor when choosing a lender, with more than half (51 per cent) saying they chose their lender based on low-cost deals.

The second most important factor, customer service, was cited by 25 per cent of those surveyed.

Some 56 per cent of respondents expect to remortgage again within the next four years, whereas one in six (17 per cent) plan to wait more than eight years.

A lull in remortgaging activity from November to December was primarily due to a seasonal slowdown, LMS claimed.

Andy Knee, chief executive of LMS said: "2016 was a great year for remortgaging. There were drivers on both the supply and demand side. Record low rates and anticipation of a rate rise in 2017 contributed heavily to the huge surge in activity.

"With inflation set to outstrip wage growth over the coming year, the opportunity to lower mortgage rates and reduce monthly outgoings will provide welcome relief for many families dreading the squeeze on household budgets – evidenced by price being the primary motivation when choosing a lender."