The summer of 2003 was a terrific time to take out a mortgage.
During the months of June, July and August you could get a fixed-rate loan for an average of four per cent. Freakishly, variable rate mortgages cost more, an undemanding 4.3 per cent nevertheless.
As you might expect, nearly half the mortgages taken out in those months were on fixed rates. The wonder is it was not more. Unhappily, most of the fixedrate deals were for two years.
This has led to suggestions that a lot of households were in for a nasty shock this summer, when they came to the end of their two years. Even after this month's quarter-point cut by the Bank of England variable rate mortgages now cost 5.7 per cent or so.
Anyone with a two-year-old £100,000 loan that is ceasing to be fixed has an extra £142 a month to find, not economic doom, but enough to notice if your family budget is stretched. And plenty of people who were buying homes or remortgaging two years ago borrowed more than £100,000.
Sure enough something happened, but not what you might expect. Last month the banks lent just over £16 billion in mortgages, only a little less than in June and much in line with recent months. But so many homebuyers paid off all or part of their mortgages that only £3.7 billion of net lending was left, less than in any month since December, 2001.
This, the clever people who compile these numbers at the British Bankers' Association discovered, was because many of the mortgages being repaid were two- year- old loans where the fixed rates were running out. Astonishingly, there was no corresponding surge of new re-mortgages by home-buyers seeking to minimise the strain with a new promotional deal.
How do they manage it? Somehow a good number of our fellow citizens are paying off mortgages that are no longer the bargain they used to be without taking out another one. It looks as if there is more cash around than you might have thought.
Incidentally, fixed rate mortgages are once again cheaper than the variable ones. They average about 5.3 per cent. That reflects a lingering hope that interest rates are still more likely to go down than up - which is not necessarily the case.