Around one in four (24%) remortgage borrowers considered variable or tracker mortgages in October, compared with 14% in February, Moneyfactscompare.co.uk has revealed.

The financial product comparison site found that remortgage borrowers researching variable and tracker mortgages increased by 71% in October compared to February, as rates shifted following the US-led conflict in the Middle East.

Homemovers researching variable and tracker mortgages increased by 25% in October, while first-time buyers researching variable and tracker mortgages remained unchanged at 10%.

The latest research comes ahead of the Bank of England’s base rate decision tomorrow, with many expecting the central bank to increase interest rates.

Head of consumer finance at Moneyfactscompare.co.uk, Adam French, said that higher rates are "changing borrower behaviour".

He concluded: "The figures suggest more borrowers are willing to gamble on interest rates to keep their initial mortgage costs down. But choosing a variable rate is a bet on where interest rates go next and today's saving could quickly disappear.

"The Bank of England is widely expected to begin raising the Base Rate on 5 November, that and any further increase will start to push up tracker repayments. The average new two-year tracker rate has already risen from 4.54% to 4.68% in October alone. Discounted variable deals also carry risks as lenders can change the standard variable rates these deals are typically linked to.

"Tracker borrowers could still come out ahead, but it depends on markets overestimating how far or how fast the Base Rate will rise. But they must be comfortable with the opposite risk that rates could rise further and stay higher for longer than expected. Ultimately, anyone considering a tracker or discounted variable deal should test whether they could afford higher repayments."

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