Sales of variable rate remortgages have plummeted in the past year, with homeowners looking for certainty over their mortgage repayments.
According to figures from LMS, sales of variable remortgage have declined by 75 per cent over the past 12 months, despite total remortgage sales increasing.
This monthly remortgage report refers to sales in October, when speculation about a rate rise increased significantly. The Bank of England subsequently raised the Base Rate by 0.25 per cent in early November.
In October variable rate remortgage accounted for just 5 per cent of the remortgage market, down form 19 per cent the year before.
In contrast, longer-term fixes became more popular, accounting for 50 per cent of all remortgages in October.
This search for security led to more people looking to refinance their mortgage. There were 40,590 remortgage transaction during the month, and over £7 billion lent.
According to LMS this is the second busiest month since the financial crisis.
Looking at the Bank of England’s seasonally adjusted figures, the number of transactions rises to 51,583, the highest monthly figure since October 2008.
LMS chief executive Nick Chadbourne says: “Borrowers identified that a rate rise was likely, and many smartly capitalised on this situation. The activity drove remortgage volumes to a peak.
“There will be interesting times ahead as the Bank of England has hinted at a long stretch of rate rises. I suspect many more consumers will opt to fix deals while rates are rock bottom and the market will continue to flourish for the foreseeable future.”