Remortgage activity is inreasing as homeowners look to capitalise on record low interest rates, LMS data shows.
In August the number of number of remortgages was 45% higher year-on-year and 8% higher month-on-month.
Homeowners are remortgaging more frequently than a year ago, with the average term of their previous mortgage falling by eight months.
People are borrowing less however, as remortgagors typically released £31,589 last month, 11% lower from £35,590 in August 2015.
Andy Knee, chief executive of LMS, said: “The Bank of England’s decision to cut the base interest rate to 0.25% continues to have a positive impact on the remortgage market. Mortgage interest rates had already fallen to record lows, which along with rising house prices has encouraged a greater number of homeowners to remortgage their homes. Indeed, last month saw the highest number of remortgages for seven years.
“However, in spite of this rise, homeowners appear to be in a more cautious mood than last month: borrowing less in the wake of a couple of turbulent months, both politically and economically, and lowering their LTV in the process. This means, despite a greater level of activity, the value of gross remortgage lending has fallen for the first time since May 2016.
“A year ago, homeowners who remortgaged had waited over five years to do so since they took out their previous loan. In many cases, that length of time will have made a world of difference to the interest rates that are available on the market and the value of their homes.
“With today’s favourable conditions, it is no surprise to see eight months shaved off the average time that people wait to remortgage and there is plenty of incentive for more people to consider acting before the year is out.”