Fixed rate mortgages proved more popular than ever in June, mortgage specialist John Charcol has revealed.
Figures published by the independent mortgage adviser show that the proportion of people choosing a fixed rate mortgage through John Charcol increased to 83 per cent in June, up from 79 per cent in May.
However, experts at John Charcol believe that fixed rate mortgages' market share may have reached its peak at 83 per cent. Ray Boulger, spokesman for John Charcol, explains: “After the sharp increase in fixed rate pricing over the last few weeks, compared with little change in tracker rates, the relative attraction of fixed rates and trackers has moved towards trackers unless one expects interest rates to start increasing rapidly before 2011."
Nevertheless, according to John Charcol's experts, fixed rate mortgages are likely to remain the top choice for the majority of clients because of the security offered by a fixed interest rate. However, Mr Boulger adds:
“We are recommending trackers to more clients this month, with the focus on low or no early repayment charges (ERCs) as well as the obvious requirements of a good rate and fee combination and possibly an offset facility."
He added: “The reason the size of the ERC is important, unless the mortgage offers a droplock option, is that many clients will want to consider switching to a fix when the time is right for them."
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