The survey, which only applies to broker-based applications, is taken from 1,000 mortgage applications between 1 January 2005 to 31 March 2005.
Paul Hearnden, managing director of MMD, said: “Tracker-based mortgages were the dominant choice for 80 per cent of borrowers arranging their loans through brokers in January this year, compared to just 20 per cent of applicants opting for fixed rate deals.”
He added: “Lenders have begun to roll out more competitive discounted rates in recent weeks, prompting a renewed interest in variable rate discounted deals, plus a noticeable rise in the volumes of fixed rate mortgages being arranged in March, but trackers remain the popular choice.”
The survey showed only a handful of fixed rates taken out were for more than two years suggesting the once favoured five-year fixed deal is on the way out.
Borrowers have become more sophisticated, favouring flexible, variable rate deals as an increasing number of lenders entered the market, with an increase in the number of borrowers opting for interest-only deals.
MMD suggests borrowers have been squeezed by higher Base Rates culminating in a surge towards lower short-term repayments.
James Cotton, mortgage specialist at London & Country, said: “Last year saw a marked rise in the number of tracker deals being taken out.
“The first quarter of this year has shown similar levels with trackers being by far the most popular for our clients. We have also noticed a slight increase in shorter-term fixed rates over the last few months.”
