Four out of five opt to fix as tracker sales slump

Four out of five new mortgages are fixed rates as borrowers increasingly turn their back on tracker deals.

Borrowers are also fixing for longer terms, with a third now choosing deals running for five years or more.

The new research, by Paragon Mortgages, shows that 81% of new cases were fixed rate products in the second quarter, while the number of trackers fell 3%.

This suggests that the threat of a base rate hike is encouraging more borrowers to fix rather than take a variable rate.

The specialist buy-to-let lender’s survey also showed that a two-year term remains the preferred length, accounting for 52% of cases.

There was a rise of 9% in terms of five years or more, which make up 32% of all new cases.

Shorter fixes have declined marginally as five-year fixes gain momentum and increase for the third consecutive quarter.

John Heron, director of mortgages at Paragon, said: “The second quarter findings highlight the popularity of fixed rate products across the wider mortgage market.

“Tracker rate products continue to appeal to some but it is no surprise to see a strong preference for fixed rates given the latest guidance from the Bank of England.

“The research continues to point to an increase in the popularity of longer-term fixed rates, it may well be that the attractive rates that have been offered will not be available for much longer.”