Borrowers rush to fix mortgage ahead of possible rate hike
Yorkshire Building Society has seen nearly double the volume of applications for fixed rate deals in just three months.
In August, it reported a ratio of fixed rate to variable rate mortgage applications of 35:1 but by October, this figure stood at 64:1.
The Yorkshire said this rise is in spite of all-time low variable rates – its two-year discounted standard variable rate (SVR) has an interest rate of 0.87%.
Speculation has been rife that Bank of England Governor Mark Carney would be pushed into raising the Base Rate given the current environment of higher inflation and better-than-expected GDP figures, in spite of weak wage growth.
The Bank of England’s Monetary Policy Committee decision on interest rates will be announced at noon on Thursday, 2 November.
But homeowners are already making a decision on which way rates will go, choosing to fix their mortgage sooner rather than later.
Simon Broadley, senior manager at Yorkshire Building Society, said: “With increasing speculation that the Bank of England could trigger a rate rise next 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.”