Borrowers opt for tracker mortgages

Fixed-rate mortgages fell in popularity in October, according to the latest figures from the Council of Mortgage Lenders (CML).

It came at a time when expectations of a cut to the base rate of interest were growing - expectations that were realised in December.

According to the CML data, 68 per cent of new mortgages were fixed-rate deals in October, down on the 72 per cent figure recorded in September.

In addition, lending volumes remained positive, with a nine per cent both month-on-month and annually.

However, the CML has revealed that it expects mortgage lending figures to fall in the months ahead as a result of the global credit crunch.

"October is the last month we expect lending volumes to be higher than a year ago as lenders and borrowers will behave more cautiously in an uncertain and slowing market environment," said Michael Coogan, director general of the organisation.

"Lenders have already responded to the credit squeeze by tightening lending criteria and increasing some loan costs," he added.