A quarter (25%) of UK adults who have a mortgage have switched to a fixed rate product in the past 12 months, Butterfield Mortgages has found.

In a survey of 2,000 UK adults, of which 667 have a mortgage, it was found that 27% of mortgage customers in the UK have made at least one or more early lump-sum repayment in the past year in order to reduce the size of their mortgage.

This figure rises to nearly half (49%) for borrowers on tracker or standard variable-rate mortgages.

The BoE has raised the base interest rate from 0.1% to 5.5% since December 2021, with rates expected to peak at 5.75% later this year. As a result, 20% of those surveyed said that they have delayed plans to buy a new home in the past 12 months, with 13% downsizing to reduce their mortgage payments.

However, over a fifth (22%) of existing mortgage customers have accelerated their home-buying plans to get ahead of any further interest rate rises. When asked on their outlook on interest rates, only 44% are confident that they are nearing their peak and borrowing costs could ease in the next year.

Butterfield Mortgages also found that two thirds (67%) of borrowers said that the mortgage market was still feeling the effects of the mini-Budget imposed by Liz Truss in September 2022.

Chief executive officer at Butterfield Mortgages, Alpa Bhakta, said: “There’s no denying that borrowers have had to navigate a particularly complex mortgage landscape over the past 12 months.

“Our research shines a light on how mortgage customers are responding – and although often overlooked, the data highlights that many people are taking proactive measures including making early repayments or bringing forward home-buying plans to stay ahead of further rate rises.

“Against the backdrop of a challenging economic climate, being proactive, staying informed and seeking advice is more important than ever, allowing mortgage customers to make sound financial decisions. For lenders and brokers, therefore, clear communication with borrowers about how their rates or products might be impacted by further hikes in the coming months will be vital to helping them navigate the high interest rate environment with confidence.”

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