Figures from a survey conducted by mortgage broker John Charcol have shown the proportion of people opting for fixed-rate deals has halved in the last two months.
Experts say it is a direct result of the recently increased costs of such deals.
The survey showed that only 41.9% of customers took a fixed-rate mortgage in August, the lowest number since December 2008. In June the proportion of people taking out the deals was 83.1%.
In contrast, the popularity of variable deals was evident, with 58.1% of homeowners choosing to take out a tracker or discount mortgage.
The change has been driven by sharp increases in the cost of fixed rate mortgages between June and Julym thanks to an increase in funding costs.
But although money market rates have since fallen back, very little of the drop has been passed on to new borrowers taking out fixed rate deals.
At the same time, competition in the variable rate market has increased during the past month, with two lenders launching sub-2% deals.
Ray Boulger, senior technical manager at John Charcol, said: "Following the Monetary Policy Committee's decision in August to extend the Quantitative Easing programme, plus subsequent comments from Mervyn King, it increasingly looks as if interest rates will remain low for at least two to three years on the back of a very slow economic recovery.
"Taking this into account we have continued to advise an increasing proportion of our clients to take a variable rate mortgage, as the differential between fixed and variable rate pricing is now such that fixed rates appear to be discounting the rise in interest rates which will eventually happen too much, too quickly."
The cheapest two-year fixed rate mortgage currently available is 3.59% from Leek United Building Society, for people borrowing up to 75% of their home's value, while the cheapest variable rate deal is HSBC's two-year discounted deal at 1.99% for those with a 40% deposit.
The majority of mortgages arranged by John Charcol continued to be taken out by people buying a home during August, with this group accounting for 57.4% of loans arranged, with people remortgaging or transferring to a new product making up the balance.
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