New figures from the Council of Mortgage Lenders showed that lending was 2% higher last month than in August and there appears to have been a shift in favour of variable rate deals in recent months.
Hannah-Mercedes Skenfield, moneysupermarket.com's mortgages expert, explained: "In terms of customer appetite, the tide has turned and customers are on the whole fixated (excuse the pun) with variable rate products."
In the first half of the year, there was an increase in borrowers looking for fixed rates, she continued.
However, these numbers have been falling as people become more confident that the base rate is going to remain low.
"Lenders have responded to this increased demand and there are currently twice the number of two-year trackers on the market as there were at the start of the year," Hannah added.
"Any indication of a base rate rise is likely to cause a flurry of fix activity, however, it's likely that lenders will have already raised their rates by the time borrowers realise an increase is on its way."
So should you follow the crowd?
If you are happy to go for a tracker, you will benefit from a lower headline rate - the leading trackers and discounts are about one percentage point lower than the best fixes. However, don't forget that your monthly payments will rise if and when base rate goes up.
For some people the premium of fixing will always be worth paying because of the security it gives. If your budget is tight and you want to know exactly what your outgoings will be each month, then don't gamble on the base rate.
What are the leading loans?
Variable rates:
Whether you decide on a variable rate mortgage, there are some competitive deals available so long as you have a decent deposit.
For example, HSBC has a two-year discount at 1.99%, but you must have a deposit of at least 40% to qualify. The deal has a booking fee of £1,199.
You will pay a higher rate if you have a smaller deposit. ING Direct has the leading two-year tracker for those needing to borrow up to 75% of the property's value. The rate is 2.79% and there is a £795 fee.
If you'd prefer a longer term deal, HSBC is offering a lifetime tracker at 2.74%, although as with its two-year discount mentioned above, you need to put down at least 40%. The fee on this product is £999.
In light of the credit crunch lenders have clamped down on who they'll lend to and the amount they'll advance. As such choice remains fairly restricted if you have less than 25% to put down. There are lenders offering loans up to 90% but again, you'll pay a higher rate. HSBC has the leading two-year tracker at 3.89% with a £1,199 fee and the leading lifetime tracker, for those wanting a longer-term deal, at 4.59%. The booking fee on this product is £999.
Fixed rates:
A mortgage is a major financial commitment and it is vital that people pick a product they are confident they can pay.
First Direct has the leading two-year fix at 3.69%. This is available for loans up to 60% of the property's value and there is a £498 booking fee. Alternatively, Mansfield Building Society has a two-year fix for those needing to borrow up to 75% at 3.79% with a £999 fee. And if you want a 90% mortgage, HSBC has a two-year fix at 5.99% with a £599 fee.
The leading five-year fix is from Britannia Building Society at 4.99%. There is a £999 arrangement fee and a deposit of at least 40% is required.
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