Borrowers Should Take 3 to 5 Year Fixed Rate Mortgages In line with advice from brokers and the media, borrowers are starting to turn to longer-term fixed rate mortgage deals of between 3 and 5 years to protect themselves from potential rate rises.
As reported by Mortgage Strategy, recent industry research, based on the activities of almost 800 mortgage consultants found that 6 out of 10 mortgages in June were for 3 to 5 year fixed rate deals. The brokers say this trend is likely to be reflected in July’s figures as well.
Some 47% of June applications were for 3 year fixes, an increase of 8% from applications in May. Loans at up to 85% LTV were the most popular during June, showing the strong demand for high LTV mortgage products following the sharp falls in house prices that have been experienced in the last 12 to 18 months.
The average interest rate amongst the top 10 most sourced mortgage products was 5.27%.
Glenville Turner, chief executive at Countrywide, says: “As house prices appear to stabilise and attract new buyers to the market, there’s a changing mood among mortgage customers with many wanting to move up the property ladder and querying when they should fix their mortgage and how long for. Home owners and new purchasers are preparing themselves for a quick succession of interest rate rises and are locking themselves in before it is too late.”
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