Variable rate mortgage stages comeback
Mortgage borrowers are becoming less fearful of interest rate rises and opting for variable rate loans in larger numbers.
July figures from John Charcol show that while fixed-rate deals retained their popularity, variable-rate mortgages, such as tracker or discounted loans, made up 35% of all mortgages arranged through the broker, compared to 17% of the market in June.
The swing reflected a sharp rise in fixed rates during the month, eroding the potential of a fix to protect against future rate rises.
The figures also show that borrowers taking out large loans were more likely to opt for a variable rate.
Commenting on the scale of the change, the firm’s spokesman, Ray Boulger, explains that fixed and capped rates took a record 84% of the firm’s business over the four months to June.
Finally, the broker has noted a “modest increase” in the availability of tracker and discount mortgages for people with deposits of less than 25%.