Around one in four remortgage borrowers were considering variable and tracker mortgages in October, according to Moneyfacts.

Analysis by Moneyfacts shows that demand for variable and tracker mortgages has shifted as rates have risen following the US-led war with Iran.

It revealed remortgage borrowers researching variable and tracker mortgages has increased by 71%.

During October 24% of remortgage borrowers researching mortgages on Moneyfactscompare.co.uk were considering variable or tracker mortgages, compared with 14% in February.

Meanwhile, 10% of homemovers researching mortgages on Moneyfactscompare.co.uk in October were considering variable or tracker mortgages, compared with 8% in February.

First-time buyers researching variable and tracker mortgages remains unchanged when comparing figures from February and October.

This comes as the market expects the Bank of England to push the interest rate up by 0.25% tomorrow.

Moneyfacts head of consumer finance Adam French says: “Higher rates are changing borrower behaviour. Around one in four remortgage borrowers researching mortgages on Moneyfactscompare.co.uk considered a variable or tracker deal in October. That is up from 14% before the war in Iran began.”

“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.”

This comes as Moneyfacts also revealed that fixed mortgage rates have hit a three-year high.

The data shows a challenging environment to reprice fixed rate mortgage deals has created a mix of activity from lenders over recent weeks.