Remortgaging drove a sharp rise in mortgage activity in the first three months of 2026, while house purchase business eased back, according to new data from Stonebridge.
The mortgage and protection network said overall mortgage activity rose 24.6% year on year in the first quarter, led by a 45.8% increase in remortgage applications as borrowers continued to come off ultra-low fixed rates taken during the pandemic.
Stonebridge said purchase applications fell 3.6% over the same period, in line with expectations that remortgaging would outperform house purchase activity at the start of the year.
The figures come as the business relaunches its Mortgage Market Briefing as a quarterly Mortgage Market Index, which it said will track key trends across the mortgage market through the year.
According to the index, the remortgage surge reflects the continued rollover of five-year fixed deals written during the pandemic, when rates were at historic lows. Stonebridge noted that in March 2021, as the pandemic-era rush for larger homes gathered pace, effective interest rates on new mortgage borrowing had fallen to 1.85%.
The latest data also points to a shift in product preferences. The share of two-year mortgages rose from 51.6% of all home loans to 65.2%, while the share of five-year mortgages fell from 39.4% to 29%.
Fixed rate lending still accounted for the overwhelming majority of the market at 94.5%, although variable rate mortgages edged up from 4.7% to 5.5% year on year.
Average borrowing costs were lower than a year earlier, despite disruption in March linked to rising swap rates during the Iran conflict. Stonebridge said the average interest rate across applications fell from 4.74% to 4.31%, while average loan-to-value slipped by 1 percentage point to 61%.
The network said improving affordability earlier in the period had supported borrowing power and confidence, with average loan amounts rising 4% overall and by 7.3% for remortgages. That compared with a 2.3% increase in property valuations.
Looking ahead, Stonebridge said remortgage demand is likely to remain elevated through the rest of 2026. It pointed to UK Finance figures showing that 1.6 million fixed rate mortgages expired in 2025, with a further 1.8 million due to mature this year.
Rob Clifford, chief executive at Stonebridge, said: “We know many borrowers locked into attractive five-year rates during the pandemic. 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.”
Stonebridge added that it remains the second-largest mortgage network by number of appointed representative firms and said it added more AR firms than any similar network last year for the fourth consecutive year.
