Mortgage applications jumped almost 42% in June compared to a year ago, according to the latest market update from Stonebridge network.
Borrowers are on average £888 a year better off, as mortgage rates have fallen by 62 basis points over the past year, it found.
Nearly two-thirds of borrowers – or 64% – chose deals fixed for three years and under in June, which Stonebridge sees as a sign that they are hoping to benefit from future rate cuts.
This is an increase from 60% of borrowers who fixed for three years and under last June.
Meanwhile, 95% of borrowers opted for fixed rates over variables last month.
Stonebridge chief executive Rob Clifford says: “While inflation remains elevated, we believe the Bank of England will cut rates at least once more this year – potentially at the Monetary Policy Committee’s next meeting in August.
“Any further cuts should feed through into lower mortgage rates in time, which should strengthen affordability and tempt borrowers back to market in greater numbers.
“The green shoots of recovery are already visible, with mortgage applications up.
“That’s a clear sign that buyer confidence is returning.
“Any further falls in rates could supercharge that momentum, supporting both mortgage lending and housing market activity in the second half of the year.”
