Popularity for 2-year fixes grew in September, rising from 35% to 42%, the LMS Remortgage Snapshot has found.
The majority (96%) of those who remortgaged in September opted for a fixed rate product.
Only 2% of borrowers chose a variable or tracker rate mortgage while purchases of 5-year fixes dropped from 48% to 43%.
Nick Chadbourne (pictured), chief executive at LMS, said: “Healthy competition between lenders combined with increased levels of consumer appetite resulted in a surge of 2-year fixes in September.
“The market is experiencing record-breaking rates when it comes to 2-year fixed products and with the advice of brokers, consumers are realising the immediate benefits of these products outweigh any potential risks.
“Moving forwards, we expect to see the market segment further as consumers continue to act according to their personal circumstances rather than wider trends.
“Potential interest rate movements may cause a change, but industry opinion remains split on this.
“The one thing we can predict with certainty is that variable rate products remain off the table for the vast majority of borrowers.”
Additionally LMS found that over half of borrowers predicted that interest rates will rise within the next 12 months, with 55% saying they think the cost of borrowing will increase by this time next year.
Some 28% believe a rate rise is more than a year away and 17% don’t expect a change at all.
The average monthly payment increase for those who remortgaged in September was £204.51 while the volume of remortgages was £53,269, up from 53,141 in August.
Nearly half (45%) increased their total loan size in September, 34% saw no change and 22% reduced their total loan size.
Some 42% increased their monthly remortgage repayments, 15% saw no change and 43% reduced it.
Outside London and the South East, the highest average remortgage loan amount for September is in the East Anglia, at £202,861.
Also outside London and the South East, the shortest previous mortgage length is in the South West, at 53.39 months.