According to Mortgages Directs monthly survey, the number of borrowers opting for five year fixed rate deals has increased from 20 per cent in October to 26 per cent in November; over a quarter of all mortgages arranged and a record high since the survey began.
The total percentage of fixed rate mortgages taken out was 97 per cent with only 3 per cent of borrowers choosing variable mortgages.
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Peter Gladdy, Director of Mortgages Direct, said: Homeowners were anxious to secure a fixed rate mortgage for a longer period of five years in November as interest rates increased for the second time this year and borrowers became alarmed about further imminent rate rises.
Mortgages Directs survey also revealed that there was an increase in sub prime business in November, with 18 per cent of borrowers opting for these mortgages compared to 13 per cent in October.
This is a trend that is likely to continue in the run up to Christmas and into the New Year as homeowners opt to consolidate their debts following a period of overspending.
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The level of first time buyers remained low in November at 32 per cent, as the group struggle to afford a property following the interest rate rise and rising prices.
Gladdy said: First-time buyers are often the most sensitive to a rise in interest rates and are still finding it increasingly difficult to get onto the property ladder. This low level is worrying as housing market activity is dependent on their influence.
If the level of first-time buyers drops down further, the market will experience a slowdown. The housing market is not strong enough to justify a rise in rates.
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