Fixed rate mortgages increase in popularity

March 27, 2009 by Brendan

News

Mortgage advisors will be seeing an increase in the number of borrowers looking for a fixed rate mortgage according to new figures from investment firm Legal & General.

According to the research, a huge 71 per cent of residential mortgage borrowers have chosen a fixed rate mortgage in the first quarter of 2009. The same quarter last year showed just 65 per cent.

Similar data was released from the Council of Mortgage Lenders (CML), which showed a growing number of property owners remortgaging to a fixed rate product.

The popularity of fixed rate mortgages can change drastically according to the public’s perception of interest rates and what the future may hold, however, with the base interest rate from the Bank of England at a record low of just 0.5 per cent, fixed rate products are starting to become more attractive to borrowers.

The Director of Housing at Legal & General, Stephen Smith, noted:

“Fixed-rate pricing has only really started to come down in the past few months and even then only for those borrowers with a hefty deposit. However, fixed-rates are very much back in favour, partly because lenders have been increasing the margins on their new tracker mortgages.”