Fixed rate deals popular in face of interest rate increase

November 6, 2015 by Brendan O'Neill

Borrowers

The number of people applying for fixed rate deals is increasing as the interest rates begin to rise.

According to the Mortgage Advice Bureau, 96% of those buying a home in September opted for a fixed rate deal. The figures were revealed in the most recent national mortgage index to be produced by the MAB. Although fixed rate deals have been at their lowest for the last 12 months, some are now beginning to rise, with the average two year deal increasing from 2.68% in August to 2.72 during September. Five year deals on a fixed rate also saw their first increase, rising for the first time since August last year. Trackers rose for the second consecutive month.

According to Brian Murphy from the Mortgage Advice Bureau, experts have been predicting a rise in interest rates following the announcement by the Bank of England’s Governor that the Bank of England base rate would increase, possibly in the new year. Eventually, that increase will become a reality and lenders are taking action now to protect their interests. Murphy stated that deals that were fixed for three years had continued to drop, so added that borrowers shouldn’t worry just yet. However, he did say that the low interest rates wouldn’t be around indefinitely.

The positive news is that the number of mortgage products on the market has increased by 4%, with different deals available. To make sure you have the most suitable deal for your circumstances, consult a professionally CeMAP qualified mortgage adviser.