Around two thirds of UK borrowers chose a fixed deal in March, says the latest Charcol Mortgage Monitor.
The monitor, published by Charcol today, shows the amount of mortgages taken on a fixed rate stormed up to 64% in March from 52% in February.
It says fixed rates were priced on average at 0.5% lower than trackers or discounts during last month, because LIBOR scaled “dizzy” heights for much of March.
Katie Tucker, technical manager for Charcol, says: “It is very rare and a sign of the turmoil in the markets that people would opt for fixed rates, when Bank rate is so widely expected to be cut at least once more this year.
“But borrowers have prioritised the security of an affordable fixed rate this time, over a high rate which has the potential of falling.”
Tucker adds: “The UK lending system is in desperate need of a Bank rate cut, preferably hand in hand with a medium-term cash loan of around £20bn to ease the pressure on mortgage lenders.”
She says this is because “sky high” mortgage costs have already started to jam up the property market.
She adds: “Halifax has reported a 2.5% drop in property value for March, the month which saw some of the most tumultuous mortgage product changes and lender withdrawals during the liquidity crisis so far, as the cost of funding soared further for lenders.”