More borrowers are opting for trackers rather than fixed rate deals for the first time in a year, shows research from Paragon Mortgages.
The Financial Adviser Confidence Tracker survey of 200 brokers shows that trackers made up 51% of their residential mortgage business in Q1, compared to 45% in Q4 2009.
Meanwhile the proportion of business for fixed rate deals dropped over the same period from 46% to 43%.
The last time the proportion of trackers overtook fixes was Q1 2009, and the current level of business arranged on a fixed rate deal is now at its lowest since the end of 2008.
John Heron, managing director at Paragon Mortgages, says: “The proportion of borrowers opting for tracker mortgages has been growing since last summer as borrowers look to take advantage of low interest rates.
“Although there are some good fixed rate deals available, the average fixed rate is still significantly higher than Bank of England base rate, and they are becoming less popular with borrowers.”
Heron says the shift away from fixes suggests that borrowers believe interest rates are set to stay low for the foreseeable future.