The proportion of borrowers choosing a fixed rate mortgage was up in May, due to fears that a rise in interest rates might not be too far off.
In a speech last night, the Bank of England governor said that interest rates will remain low for the foreseeable future, but uncertainty drove 26 per cent of borrowers to choose a fixed rate mortgage last month, the highest level since 2009.
Tracker mortgages have become flavour of the month since interest rates plummeted to record lows last year, where they remain, but the figures from mortgage advisors John Charcol suggest that some consumers are not taking any chances.
Drew Wotherspoon, director of marketing at John Charcol, explained that a "combination of widespread uncertainty in the economy, magnified by equal uncertainty in the political landscape, and a significant reduction in their cost" led to more than a quarter of borrowers choosing a fixed rate mortgage in May.
Some borrowers are beginning to "look for real safety in what are bound to be some choppy years ahead," he said, and for those who are looking for long-term security from their fixed rate, there are some competitive deals available, including five and 10 year fixes.
Mr Wotherspoon expects competition to improve in the fixed rate mortgage market during the coming months, as more borrowers turn away from the attractive rates of tracker mortgages to the safety of a fixed rate.
"Knowing what the future for interest rates looks like is an exercise in crystal ball gazing, but the reality is that there is only one way interest rates can now move - it's just when and by how much," he mused.
"Some borrowers are undoubtedly still adopting a wait and see approach, but the narrowing in the price differential between fixed and variable rates over the last few months has led some to act now. In March of this year, the difference in rates between product genres was as high as 2.5%, but this has shrunk to just below 1.5%, which has clearly been enough to tempt more consumers to take a fix."
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