Variable rate mortgages are continuing to prove popular as some of the UK's biggest lenders cut the cost of deals.

Mortgage broker John Charcol said that 81% of the home loans it arranged in December were variable rate deals.

Meanwhile, the Woolwich and the Halifax have reduced the cost of some of their tracker deals in recent days.

The Bank rate has remained at a record low of 0.5% since March 2009 and economists do not expect the central bank to raise rates in the near term.

This has resulted in many homeowners paying relatively little on their monthly mortgage bill, which experts have said has fended off the threat of home repossession for some.

Fix or not?

Low interest rates have led to a squeeze in returns for savers over the last year, but those on variable rate mortgages have benefited.

Many homeowners have reverted to cheaper variable rate deals when their fixed rate term has come to an end. As a result, remortgaging numbers have remained at low levels.

Now, some have been asking whether they should return to the security of a fixed rate deal, pre-empting any rise in interest rates.

"With the average difference between the fixed rates and the initial rate on the best trackers around 1.5% in favour of trackers, it will currently take a substantial rise in Bank rate for a borrower who takes a tracker to be worse off than one who opts for a fixed rate," said Ray Boulger, of John Charcol.

He said that those who wanted the security of fixed rate payments should look towards a five-year, rather than two-year term when considering value for money, although lots of issues should be considered in each specific case.

Meanwhile, the Council for Mortgage Lenders has suggested that proposed new rules to protect tenants if landlords fall behind on their mortgage payments are being rushed through Parliament.

The bill is intended to help a relatively small number of tenants when a borrower falls into arrears with a residential mortgage and is letting the property without the lender's knowledge or consent.

It warned that the new rules could unnecessarily delay repossession proceedings when they were considered the best option for a borrower.