Back in January, just 46.3% of borrowers chose fixed rates over a variable rate deal, according to a broker index, down from 90% in May 2009 after rates hit the historic low of 0.5% in March 2009.
Commentators on the latest Mortgage Advice Bureau/Coreco National Mortgage Index said the feeling 2011 will be another tough year means consumers are looking for protection from “market uncertainties.”
Brian Murphy, head of lending at UK-wide independent mortgage broker Mortgage Advice Bureau, said: “With the almost month-on-month reduction in fixed rate pricing during 2010, it is no surprise to see almost two thirds of borrowers have gravitated towards fixed rates.”
Andrew Montlake, director at London-based independent mortgage broker Coreco Group, added: “Fixed rate products continue to hold on to their new found popularity as the expectation of future rate rises gets ever bigger and remortgage customers continue to take advantage of some exceptional fixed rate offerings.”
Mortgage finance remains tight with average LTVs on purchase mortgages dropping slightly from 70.4% in October to 70.1% in November, according to the index, with average LTVs staying at or below 71% this year.
The average deposit put down by a purchase mortgage applicant in November was £37,722 compared to £36,699 in October.
Meanwhile, the average loan size for purchase mortgage applications increased from £123,982 in October to £126,162 in November, a rise of 1.8%.
Total remortgaging and buyer activity was up 23.4% for the year to date compared to the same period in 2009.
However, remortgage activity fell by 6.5% in November compared to October. The average LTV on remortgage applications rose only marginally from 55% in October to 55.1% in November, while the average remortgage loan size increased by a substantial 27.5% in November to £166,899 compared to £130,913 the previous month.
“However, mortgage activity, month-to-month, continues to be unpredictable, as a tough year for the mortgage market as a whole draws to a close,” said commentators.
