Research by LMS, a provider of outsourced property services, found that with lenders recently launching a number of sub 3% rates with terms of 4 or 5 years there was a surge in remortgage applications in late July that has continued into August.
Borrowers who are remortgaging are typically increasing the size of their loan, releasing an average of £16,000 equity to allow them to pay off other more expensive debts or to improve their standard of living.
The term of the previous redeeming loan is typically four years and five months. This has shortened since 2011 when it averaged five years and two months.
Andy Knee, chief executive of LMS, said: “July’s remortgage lending is still low in the context of the history of mortgage lending.
"The July value followed a sharp fall in June, itself the lowest remortgage lending figures since December 2010. The low monthly figures reflect the fact that many borrowers, already on competitive existing rates, have had little incentive to remortgage.
"Indeed, most new deals which borrowers could have taken out and completed in June or July would not reduce monthly repayments sufficiently to encourage people to remortgage so borrowers have held off taking any action.
"We had been expecting this to be a disappointing time with the distraction of the Olympics but the reverse has happened. These applications should become completions in late August and September and suggest that we will see a sharp rise in remortgage lending later in the year.”