One in four mortgages are fixed rates
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Only one in four mortgage applications through John Charcol in October were for fixed rate deals, data from the brokerage reveals.
John Charcol’s monthly mortgage activity index shows that last month fixed rates accounted for just 26.3% of total mortgage applications, the smallest market share since November 2008.
It is a steep drop since the number of fixed rate deals peaked in June, when they made up 88.3% of the market.
But the index does show some encouraging signs that first-time buyer appetite is improving.
The percentage of purchase cases that came from first-time buyers rose to 15.3%in October, up from 10.4% in September.
Drew Wotherspoon, director of communications at John Charcol, says: “With the outlook for interest rates little changed over the last month an even higher proportion of borrowers chose a variable rate mortgage, in most cases a tracker.
“The Bank of England’s announcement this month of an extension of the quantitative easing programme by a further £25bn is another indication that Bank base rate in unlikely to rise in the next few months.
“Even if longer term fixed rates don’t get much cheaper than those currently available at just under 5%, there seems a good prospect that borrowers on a variable rate will be able to benefit from rates more than 2% lower for the time being and then switch to a similarly priced fixed rate later.”
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