A study has revealed that nearly 90% of mortgage borrowers are choosing to purchase a fixed-rate loan, than any other type of money aid.

A financial lending firm displayed that 87% of residential borrowers opted for a fixed rate in the second quarter, compared to 71% in the first three months in 2009.

The research also found that the average two-year fixed rate jumped to 5.46% from 4.78% in the first quarter, despite the average rates falling over the past decade.

Stephen Smith, from the group stated: “Borrowers who are prepared to take out variable rates have been few and far between in the past three months. And who could blame them? Margins on these products are high and it's almost a cast-iron certainty that when the base rate next moves, it will be upwards.

“Fixed rates had been offering the full package until recently – they had been getting cheaper and they offer valuable peace of mind in a turbulent and uncertain environment. Some of the fixed rates on offer have been very good value, but many are now very much on the rise.”

He added: “It feels as if we are entering a new phase of the credit crunch now – talk of a recovery has been gathering pace and fixed-rate pricing may well have bottomed out.

“There has been no significant upturn in house sales or mortgage lending, but both consumer and adviser confidence is up. Let's hope this translates into real results.”