Rising inflation and the threat of further increases in the base rate means homebuyers “are probably right” to opt for fixed rate mortgages, it has been claimed.
According to the Centre for Economics and Business Research (CEBR), demand for fixed-rate mortgage products has “rocketed” in recent months.
Normally this would be seen as a panic measure, but in the present climate it is probably justified, said CEBR spokesman Jonathan Said.
“In the longer term there is space for the argument that interest rates might average a bit higher – there would seem to be a case for consumers to want to go for a fixed rate,” he said.
The interest rate has risen three times in the last 12 months and buyers are probably just trying to “hedge their bets”, he added.
Analysts are widely predicting the interest rate to be raised again next week as a result of inflation breaching a three per cent upper limit in March.
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