The number of mortgage borrowers opting for tracker deals has trebled last month compared to the same time last year – a likely response to the Iran war, according to mortgage and protection network Stonebridge.
Its analysis found that the number of those opting for tracker mortgages increased threefold to 12% in April, up from 4.1% a year earlier.
Fixed-rate deals fall
By contrast, the proportion of fixed rate deals fell to 87.6% last month, from 95.4% 12 months earlier. This compares with a 5.5% share for variable rate deals in Q1, according to Stonebridge’s quarterly Mortgage Market Index.
Rob Clifford, chief executive of Stonebridge, said he believes the fact that borrowers are opting for trackers, rather than the certainty of fixed rates, means that many borrowers are confident that the conflict and subsequent inflation shock will be short-lived.
Clifford said: “It’s a fascinating time to be a mortgage adviser. At times like this, borrower preferences can give you an inside track on what people really think geopolitically.
‘Valuable intelligence for advisers’
“At the moment, they are signalling that they believe the worst may be over. Borrowers are increasingly willing to take on a little more risk for the chance of lowering their monthly payments when the crisis ends and rates start coming down.
“This is valuable intelligence for advisers, not because all borrowers are the same but because it underlines how important the question of risk is for customers and how we must not assume that all borrowers are risk-averse. A first-time buyer and someone with a 95% LTV may have identical opinions on international events, but they might be in completely different camps when it comes to product type.”
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