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LMS figures reveal that monthly gross remortgage lending increased by £330m in March to £2.9bn. This is up 12.9% on February’s £2.6bn reported by the Council for Mortgage Lenders last week.

The CML has also reported that total gross mortgage lending rose 10% in March to £11.6bn, from £10.5bn in February. As a result, remortgages now represent a quarter of the market.

LMS estimates that the total number of remortgage loans in March increased by 16.2% to 20,699, compared with 17,812 in February. This is also down 24.8% from 27,534 in March of last year.

The average remortgage loan amount has fallen for the first time since May 2012 and now stands at £139,280. However, despite this fall, it is still £3,000 higher than the peak at the beginning of 2012 (£136,083 – January 2012).

“Remortgage activity outpaced total gross mortgage lending with a strong 13% rise in March. Remortgage borrowers are also taking advantage of current competitive mortgage rates to increase the size of their mortgage borrowing, releasing an average of £20,982 cash in order to spend or reduce other debts. As a result, remortgage borrowers are also taking on higher repayment commitments relative to their income.

“Remortgage repayments as a percentage of income are now at the highest for over 3 years at 21.2%. This percentage is now almost the same as for new purchase borrowers, 21.4%, who have typically borrowed more than remortgagors.

Amy Loddington

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