Fixed-rate mortgages becoming more popular

A new report suggests that homebuyers are opting for a fixed rate mortgage in ever increasing numbers.

According to the Council of Mortgage Lenders, a record number of people chose such a mortgage in the first month of 2007.

CML statistics show that 85 per cent of first-time buyers and 72 per cent of the total number of people moving house took out a fixed-rate mortgage.

The increasingly popularity of the fixed rate deal may be down to constant uncertainty over interest rates, a CML spokesman suggested.

“Each month it seems that the prospect of another interest rate rise is balanced on a knife edge. More and more borrowers are protecting themselves against this risk and choosing the certainty of fixing their monthly mortgage payments, which allows them to plan ahead with confidence,” said CML director general Michael Coogan.

In related news, a recent report from the Mortgage Advice Bureau (MAB) revealed that more homebuyers than ever before are looking for a 100 per cent mortgage.

Over 2006, there was a 26 per cent rise in the number of 100 per cent mortgages granted, according to the MAB.

© Adfero Ltd

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