Borrowers coming off ultra-low deals fuel stronger refinancing pipelines for intermediaries
The volume of remortgage applications rose by almost half in the first quarter of 2026, helping to lift overall mortgage activity by about a quarter, according to latest data from mortgage and protection network Stonebridge.
The firm’s inaugural quarterly Mortgage Market Index, rebraded from its regular Mortgage Market Briefing, indicates that total mortgage applications in Q1 2026 were up 24.6% compared with the same period in 2025, led by a 45.8% increase in remortgage business as borrowers continued to reach the end of ultra-low pandemic-era fixes.
| Change in number of applications (Q1 2026 vs Q1 2025) | |||
|---|---|---|---|
| All | Purchase | First-time Buyer | Remortgage |
| 24.6% | -3.6% | -3.9% | 45.8% |
| Source: Stonebridge | |||
Five years earlier, in March 2021, when the “race for space” was under way, the effective interest rate on new mortgage lending stood at 1.85%.
This pattern aligns with the Bank of England’s Credit Conditions Survey for the fourth quarter of 2025, which had signalled a rise in remortgage activity in early 2026 and a decline in secured lending for house purchase.
Stonebridge’s figures show that purchase applications slipped 3.6% year on year in Q1. Product choice remained dominated by fixed rates, which accounted for 94.5% of applications, although the share of variable-rate borrowing edged up from 4.7% to 5.5%.
Two-year fixed terms gained ground. Their share of lending increased from 51.6% to 65.2%, while the proportion of five-year products fell from 39.4% to 29%.
Despite geopolitical tensions and higher swap rates linked to the Iran conflict in March, average mortgage pricing fell on an annual basis. The typical interest rate recorded by Stonebridge declined by 0.43 percentage points, from 4.74% to 4.31%. Average loan-to-value ratios were broadly unchanged, easing by one percentage point to 61%.
Stonebridge reported that the lower rate environment in early 2026 supported affordability and confidence, feeding through into higher advance sizes. Average loan amounts rose by 4% year on year, and by 7.3% in the remortgage segment, outpacing a 2.3% increase in average property valuations.
| Average loan amount | |||
|---|---|---|---|
| Q1 2025 | Q1 2026 | Change YoY | |
| All | £196,163 | £204,002 | 4.0% |
| Purchase | £222,238 | £233,111 | 4.9% |
| FTB | £211,524 | £221,057 | 4.5% |
| Home mover | £236,499 | £249,014 | 5.3% |
| Remo | £176,557 | £189,523 | 7.3% |
| Source: Stonebridge | |||
The network expects remortgage demand to remain elevated. UK Finance has previously estimated that 1.6 million fixed-rate mortgages ended in 2025, with a further 1.8 million set to mature in 2026.
“We know many borrowers locked into attractive five-year rates during the pandemic,” said Rob Clifford (pictured right), chief executive at Stonebridge. “Now that so many of those consumers are reaching the end of the deals they grabbed at that time, we are naturally seeing huge demand for advice on refinancing options.
“That will continue throughout this year, with plenty of lenders dynamically pricing both product transfers and remortgage deals to win market share. We’re likely to see a reversal in rate volatility in the second half of the year and the popularity of variable or tracker rates might increase.
“If the energy crisis is short lived, a variable product would allow borrowers to capitalise on a falling base rate once the conflict subsides but this is a time when impartial and expert mortgage advice is worth its weight in gold.
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