John Charcol’s figures revealed 26% of its borrowers chose for fixed rates, the highest level since October 2009. The broker expects this increase to continue in the coming months, particularly with the recent reduction in price differential between fixed and variable rates.

However, Ray Boulger, senior technical manager for John Charcol, said tracker rates are likely to continue to offer good value and fixed rates could come down further, after Bank of England Governor Mervyn King suggested that interest rates will stay low much longer than economists have forecast.

The Governor told Mansion House that inflation will stay above target for the next year and then fall below target in two to three years time. Boulger commented: “The MPC always looks ahead for two years and so with a current expectation that inflation will be below target on that timescale it is hard to see much, if any, movement in Bank rate for some considerable time, providing there are no external inflationary shocks to the system.”

Melanie Bien, director of communications for Private Finance, said: “The pick-up in fixed rates has happened because they are so cheap and competitive right now. We feel that the outlook for interest rates is that they will stay low for the next couple of years. With trackers, rates would need to go up 1.5% before people on them are worse off. Yet, when rates are this low, why not fix? But a lot of people will still be better off if they can hold their nerve.”