The Bank of England (BoE) decision in May to hold interest rates at 0.5% prompted a surge in the number of people searching for tracker mortgages.
Data released today in the Experian Credit Search Barometer revealed 46.8% of mortgage shoppers were looking at tracker products in May compared to just 32.5% in April.
While Experian said it was highly likely many of these customers would ultimately opt for a fixed-rate mortgage, the data indicated the BoE base rate remaining at 0.5% had influenced potentials borrowers enough to consider a tracker for their mortgage.
In fact, the number looking for fixed-term deals in May fell to 24.1% from 31.7% in April. And Experian’s data also revealed the number of consumers looking at variable mortgages had tumbled from 35.6% in April to 29% in May.
Amir Goshtai, managing director of Experian Marketplace and Affinity at Experian, said: “The BoE held the base rate again last [month], but with speculation that a rise could come as soon as August, people shopping for a mortgage will have to think carefully about what option will be best for them.”
Improving creditworthiness
Experian’s report also looked at other types of borrowing and found nearly a quarter of credit card searches were for credit builder cards.
These are products which allow people with ‘thin’ credit files or poor scores the chance to get on track and improve the creditworthiness, something which can help improve people’s chances of getting a mortgage.
Experian said this indicated many people were trying to take control of their finances. However it said it was surprised to find the average age of those searching for the cards was 34.
Goshtai said: “It is interest that the average age of those looking to build their credit score is 34 – you’d assume that those shopping for these types of card would be much younger and could be seen as a sign that some have struggled with borrowing in their 20s.”
