Mortgage borrowers did not wait for the Bank of England’s confirmation before acting in December, with new data showing demand peaked days ahead of the base rate cut and a growing number taking on more rate risk on the day itself.
Analysis from Twenty7tec shows mortgage searches hit their highest level of the month on December 9 when some 69,462 searches were recorded, nine days before the Bank cut the base rate to 3.75% on December 18.
By contrast, activity on the decision day itself was lower, at 54,847 searches, despite still running 12.7% higher than the equivalent day last year.
The early surge suggests borrowers were responding to sustained media speculation around an imminent rate cut, choosing to move before the announcement rather than waiting for certainty.
Owner-occupiers led the charge. Standard residential searches on 18 December were up 15.1% year on year, rising to 41,803. Buy-to-let demand also increased, up 7.1% compared with December last year.
Alongside the rush to act early, the data also shows a shift in borrower risk appetite on the day of the decision.
While fixed rates remain dominant, accounting for 50.8% of searches across December to date, their share dipped to 49.9% on the decision day. At the same time, tracker mortgages climbed from 8.6% of searches month-to-date to 9.1% on 18 December, a relative increase of more than 6%.
Other rate types that benefit sooner from further base rate cuts, including discount, variable and SONIA-linked products, also saw their share rise on the day. Together, this points to a growing minority of borrowers willing to bet that rates will keep falling, rather than locking in today’s pricing.
The data suggests the December base rate cut did not spark a last-minute scramble. Instead, borrowers made their move early and, when the cut finally arrived, showed greater confidence in taking products that leave them closer to future rate moves.
Nakita Moss, Head of Product at Twenty7tec says: “This is a familiar pattern we see around base rate decisions. Borrowers tend to move early as expectations build, activity eases slightly on the day itself, and there is usually a noticeable uptick on the Monday that follows as people pick conversations back up. With this decision falling so close to Christmas, that post-decision bounce may not fully materialise until January.”
“For advisers, that means December activity should not be read as a slowdown in demand. Many borrowers have already done the groundwork, and those conversations are likely to reappear quickly once the new year begins. Advisers who stay proactive, follow up early in January, and are ready to talk through both fixed and tracker options will be best placed to convert that pent-up demand.”
