The number of refinancing applications rose by 46% in the first quarter of this year compared to the same period in 2025, data from Stonebridge shows.
However, the number of home purchase applications fell by 3.6% in the first quarter and the number of starter applications fell by 3.9% compared to last year.
The jump in mortgage refinancing pushed total mortgage activity up 25% year on year, despite the weakening of the purchasing market.
Mortgage refinancing activity is expected to remain strong throughout the year as UK Finance reports that 1.8 million fixed interest rates will expire in 2026.
The popularity of the two-year fixed rate increased by 26% and represented 65% of the market.
Meanwhile, five-year fixed interest rates fell by 26%, bringing the share of applications to 29%.
Borrowing costs fell annually, despite the impact of rising swap rates since the outbreak of the war in Iran.
The average interest rate fell by 43 basis points year on year from 4.74% to 4.31%.
Stonebridge chief executive Rob Clifford said: “We know that many borrowers were locked into attractive five-year rates during the pandemic.
“With so many of those consumers reaching the end of the deals they signed at the time, we are obviously seeing a huge demand for advice on refinancing options.
“That will continue this year, with many lenders dynamically pricing both product transfers and remortgage deals to gain market share.
“We are likely to see a turnaround in interest rate volatility in the second half of the year and the popularity of variable or tracker rates could increase.
“If the energy crisis is short-lived, a variable product would allow borrowers to benefit from a falling base rate once the conflict is over, but this is a time when impartial and expert mortgage advice is worth its weight in gold.”