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Interest in variable rate mortgages 'rising'
New figures have revealed that consumer interest in variable rate homeowner loans rose during December.
The study by John Charcol found that four out of five home loans arranged by the company in the final month of 2009 were variable rates, with the proportion of fixed rates falling below 20 per cent of the first time since August 2008.
Ray Boulger of the organisation said there was "really no surprise" in the figures, despite the seemingly large split between the two product types.
"It is absolutely our belief that the best value lies in tracker rates at present," he explained.
"With the average difference between the best fixed rates and the initial rate on the best trackers around 1.5 per cent in favour of trackers, it will currently take a substantial rise in bank rate for a borrower who takes a tracker to be worse off than one who opts for a fixed rate."
Earlier this week, research from the Council of Mortgage Lenders revealed gross homeowner lending in the UK rose by 14 per cent during December.