The proportion of borrowers opting for fixed rate mortgages reached record levels in the three months to June, having increased by some 15 per cent compared to the first three months of the year.
Between May and June, seven in ten mortgage applications made to intermediaries were for fixed rate products, a survey by Paragon Mortgages has revealed.
The 70 per cent figure is the highest recorded since the survey was launched in 1996 and reflects a marked change compared to the first three months of the year, when just 55 per cent of applications to intermediaries were for fixed rate mortgages.
As recently as the period between October and December last year, the number of applications for tracker mortgages outnumbered those for fixed deals, at 59 per cent.
The results reflect the withdrawing and repricing of trackers, as well as the Bank of England's decision to set the base rate of interest at a record low 0.5 per cent.
Of all products, two year fixed rate mortgages remained the most popular amongst borrowers, with four out of ten opting for this term. Three year fixes (32 per cent and five year fixes (24 per cent) followed.
"With borrowers unsure about the next move for interest rates, they appear to have been opting for the security of fixed rate deals," said John Heron, managing director at Paragon Mortgages. "It is likely that the next move for the base rate will be upwards, but it is unclear when that will be.
"However, borrowers' hands may have been forced a little as lenders withdrew a number of tracker deals when interest rates were falling. The options for borrowers have generally been limited as mortgage finance across the UK market has dried up."
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