Demand for trackers plummet: Abbey

Consumers are increasingly looking for alternative to tracker mortgages, due to expectations of rate rises this year, according to research from Abbey for Intermediaries (AfI).

Research from the lender suggests only 13% of homeowners due to remortgage in the next six months will opt for a tracker, compared to 33% just two months ago.

However, the proportion saying they would opt for a fixed-rate deal has increased from 20% to 23% over the last month. Half of these people favour a two-year fixed-rate product rather than a three or a five-year deal.

Ricky Okey, managing director of AfI, says: "Borrowers have seen a large number of highly competitive fixed-rate deals come on to the market recently and with many commentators predicting a base rate rise this year, homeowners now seem more inclined to play it safe with a fixed rate deal."

The research also suggests over 880,000 UK homeowners on tracker or fixed-rate mortgages could be looking to remortgage in the next six months. This equates to some 4,848 potential remortgages each day over the next six months, of which 31% said that they would seek advice from a mortgage broker or IFA.

Over half of homeowners who will be remortgaging in the next six months say the opportunity to take advantage of a good rate is the factor that will most influence their decision on which deal to take.

Okey says this shows there is still a significant amount of business in the market and consumer confidence in the advice received from intermediaries remains high.

AfI has reduced the rates on some of its two year fixed-rate products by up to 0.4%. The two new deals are a 4.99% two-year fixed-rate mortgage with a £995 fee at up to 80% LTV for remortgage for purchase.