According to data released by Mortgage Advice Bureau (MAB), 75% of all mortgages applications excluding remortgages were for fixed rate products last month.
This compares with the percentage of applications in January 2010 when 45% of all borrowers had opted for fixed rate mortgages.
The latest figure is still significantly lower than the level witnessed in March, April and May 2009, when 90% of all borrowers had chosen fixed rate, revealed MAB.
“It’s not surprisingly January saw borrowers migrate to the safety that fixed rate deals offer”, said Brian Murphy lending Head at MAB.
“With a variety of fairly negative economic news, rising inflation and an increase in unemployment levels, borrowers who are active in the market, are erring on the side of caution and increasingly opting to fix their repayments”, he added.
The average Loan-to-value (LTV) on mortgage applications also went up to 72% in January compared to 70.9% in December 2010.
People seeking mortgage finance also went up by 18.4% in January, over same period last year. The rise in January was steeper on monthly basis and was recorded 23.3% higher over December 2010.
The sudden spurt in mortgages was due to inclement weather in December, forcing people to delay their transactions, said Murphy.
Talking about remortgages, Mr. Murphy said activity has picked up in January after the understandable slump in December to previous levels.
“Remortgage activity has definitely picked up and interest rate uncertainty is a key factor driving this uplift, as borrowers on standard variable rates take uncertainty out of the equation”, concluded Mr. Murphy.