Remortgaging homeowners are seeking out lower interest rates and longer fixed deals, according to conveyancing service provider LMS.
Some 32 per cent of homeowners who remortgaged in March moved to a five-year fixed deal, despite just one in ten previously having fixed their rate for so long.
Figures from LMS show 19 per cent of those remortgaging lowered their monthly repayments, while 84 per cent saw their interest rate fall.
But the average mortgage rate has climbed for the first time since September 2016. The average rate was 2.13 per cent in February, up from 2.06 per cent in January – the biggest jump since June 2012.
Just 1 per cent of people surveyed by LMS expect rates to fall, while 46 per cent think rates will rise within a year.
Meanwhile, the number of people on a variable rate fell from 19 per cent to 7 per cent.
The average mortgage repayment now accounts for 17.3 per cent of a homeowner’s annual salary, down from 18.4 per cent in January.
LMS chief executive Andy Knee says: “Homeowners have sought out cheap prices and long-term security when remortgaging. For those who managed to remortgage in March, this will be of paramount importance in the months to come.”
Remortgaging made up 25 per cent of total lending in March, down from 29 per cent in February. Remortgage lending edged up just 1 per cent to £5.26bn in the month.
LMS says homeowners may have been holding off of making a decision about their mortgage ahead of the triggering of Article 50 in March.
Knee says: “Therese May’s decisions to trigger Article 50 stopped a surging remortgage market dead in its tracks. A general election and Brexit negotiations could spell disaster, and coupled with rising interest rates, the remortgage market looks set to experience some tricky months between now and the end of the year.”