Remortgage applications fell 20.8% year-on-year in Q2, though Stonebridge noted this must be read alongside a 45.8% annual surge in remortgage activity in Q1, when a significant wave of pandemic-era fixed deals began to expire. That refinancing cycle is expected to continue throughout 2026.
Applications for home purchase declined 15.5% annually, while first-time buyer volumes dropped 15.7%. Average loan sizes fell 1.8% to £209,932, though first-time buyers borrowed marginally more than the prior year, with average loans of £216,984 — a 1.5% increase.
The trend aligns with separate Bank of England data published earlier in late June, which recorded a 10.8% annual decline in mortgage approvals for May.
Rate uncertainty continued to shift borrower behaviour towards shorter-term products. The share of two-year fixes rose 10.6 percentage points, from 59.4% to 70%, while five-year fix uptake fell 9.1 percentage points to 23.2%. Variable rate products more than doubled their share, from 5.2% to 12.1%, as borrowers positioned themselves to benefit from any future rate reduction.
“The second quarter was really a stick-or-twist moment for those thinking of moving, buying or remortgaging, and there’s no doubt we’ve seen activity slow a little as expected,” said Rob Clifford (pictured right), chief executive of Stonebridge. “However, the key thing to keep your eye on is the expected path for inflation as we move into the second half of the year. I am confident about the outlook.”