Yorkshire Building Society has seen a surge in the number of borrowers seeking fixed rate mortgages ahead of a possible rate rise.
The ratio of fixed rate to variable rate mortgage applications received by the mutual leapt from 35:1 in August to 64:1 in October.
Borrowers are opting for the greater certainty of a fixed rate despite Yorkshire’s offer of a two-year discounted standard variable rate (SVR) with a current interest rate of 0.87 per cent.
The Bank of England’s Monetary Policy Committee's (MPC) latest decision on interest rates is set to be announced at noon on Thursday (2 November).
Most commentators expect the MPC to raise the base rate from its current record low of 0.25 per cent to 0.5 per cent following a rise in inflation and better-than-expected economic growth of 0.4 per cent in the third quarter.
Simon Broadley, senior manager at Yorkshire Building Society, said: “With increasing speculation that the Bank of England could trigger a rate rise this week, our data indicates borrowers are keen to secure a deal before any potential increase.
“Despite having the lowest ever variable rate mortgage on the market, our findings demonstrate that borrowers value being able to lock-in to a fixed rate deal and know that their monthly payments won’t change during their initial term.”
Robert Lewis, operations director at north Wales-based Heritage Financial Solutions, said: “We have seen it ourselves. We are doing a lot of mortgages, especially remortgages, and around 90 per cent of people are going for fixed rates and for longer terms.
“There is a real feeling that if rates don’t go up in November, they will go up in December. People just want to lock in and get security.”
Mr Lewis added that even though rates are only expected to rise slightly, people are “really fearful” of an increase as many have never experienced one before.