Fixed-rate mortgages most popular option for cautious homeowners

According to the Building Societies Association, 90% of new mortgage deals secured during July, August and September were fixed-rate products, as homeowners remain cautious about expected rises in the cost of borrowing.

According to figures recently released, building societies have retained a 29% share of mortgage approvals, despite overall lending being subdued. The second quarter of the year also demonstrated 29% of the market share, while the first quarter of the year was slightly higher, at 31%. Gross lending has also increased for building societies, with the third quarter of this year showing £17.3bn – an increase on the 2016 figure.

The chief economist of the Building Societies Association, Andrew Gall, said that there had been an increase in remortgaging just before the Bank of England increased the base rate to 0.5%. In quarter three of 2017, nearly 90% of mortgages taken out were for fixed-rate deals, protecting buyers from predicted interest rate increases over the next few years.

The director at Mortgage Concepts Associates, Mike Richards, said:

“Lenders are lenders and can be good or bad, but I think generally building societies do provide a better service than some of the corporate banks.”

He added:

“Some of the banks have got pretty bad press over the last few years, and people are wary of them.”

Mortgage advisors invest in CeMAP courses so that they are able to help their clients decide which lender will be most able to fulfil their requirements.


Bricks and Money

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