Demand for variable rate mortgages has increased despite the recent rise in Bank of England base rate, according to Yorkshire Building Society.
The firm says it has seen a marked increase in the number of customers reserving variable rate deals, following the decision by the Bank of England to raise interest rates by 0.25 per cent last week.
In the week prior to the change in interest rates just 3 per cent of customers reserving a mortgage deal opted for its discounted variable rate.
In the week following this decision the percentage of customers reserving this deal increased to 6 per cent.
Yorkshire Building Society’s senior mortgage manager Mike Sims says it’s clear that this modest rate rise has not deterred borrowers.
He says: “It’s interesting that some borrowers are still keen to secure a variable mortgage despite the first Base Rate rise for a decade being announced.
“Some borrowers clearly value the opportunity to keep monthly repayments down over certainty of how much they will pay, and appear confident that the Bank of England won’t increase rates at pace, at least during the initial term of their mortgage.”
However, despite the increase in the number of customers seeking variable rate deals, the vast majority of customers still took out fixed-rate options.