Mortgage borrowers appear to have been spurred into life by last year's rise in the base rate, after official figures revealed a sharp upturn in mortgage activity in November.
According to the latest data from UK Finance, around 38,400 remortgages were arranged last November – 8.5% more than in the same month a year earlier, as homeowners reacted with urgency to the rise in borrowing costs.
At the same time, there was a 16.8% year-on-year rise in the number of new home mover mortgages and a 15.2% uplift in first-time buyer mortgages compared with November 2016.
"This was the first month that an interest rate rise could have dampened the spirits of borrowers," said Alastair McKee, managing director of One 77 Mortgages. "But instead of beating a retreat, they have taken the first hike in 10 years as the starting gun on more to come. In fact, what the Bank has done is remove a lot of the apathy that had built up because rates have been so low for so long. People had started to take them for granted and this has jolted borrowers into action.
"The result is that the feeding frenzy continues around a bait ball consisting of rates so cheap that mortgage repayments are still about as affordable as they've ever been."
Indeed, while mortgage rates have increased since the base rate returned to 0.50%, the latest Moneyfacts UK Mortgage Trends Treasury Report revealed there has been a slowdown in rate rises of late; the average two-year fixed rate has actually remained unchanged in January.
As there is a chance that the respite is temporary, and an upward trend could re-emerge now that Christmas has passed, anyone thinking about a new mortgage or remortgaging is unlikely to gain anything by waiting much longer.
And in the context of where mortgage rates still rank compared to years gone by, mortgage costs remain historically low, with some extremely cheap mortgage deals still to be found.
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