Variable rate mortgages continue to be the borrower's product of choice, as fixed rates stubbornly refuse to drop significantly.
According to the latest research from John Charcol, just two in five borrowers chose a fixed rate mortgage in August, the lowest number since December last year.
Meanwhile, almost 10% of clients who opted for a variable rate chose a discount off standard variable rate (SVR) rather than a tracker.
Explaining the current attraction of the variable rate mortgage, Ray Boulger of John Charcol said: "Following the Monetary Policy Committee's decision in August to extend the quantitative easing programme, plus subsequent comments from the Governor of the Bank of England Mervyn King, it increasingly looks as if interest rates will remain low for at least two to three years on the back of a very slow economic recovery."
"Taking this into account, we have continued to advise an increasing proportion of our clients to take a variable rate mortgage, as the differential between fixed and variable rate pricing is now such that fixed rates appear to be discounting too much and too quickly the rise in interest rates which will eventually happen."
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