Fixed-rate mortgages ‘out of favour’

Fixed-rate mortgage deals are continuing to see their share of the market drop, mortgage broker John Charcol has noted.

The firm’s figures for October show only 26.3 per cent of homebuyer loans to be of this kind, the lowest total in a year and the fourth successive decline.

As recently as June, 83.1 per cent of mortgages had been fixed deals.

Commenting on the change in the situation, spokesperson Drew Wotherspoon observed: “With the outlook for interest rates little changed over the last month an even higher proportion of borrowers chose a variable rate mortgage, in most cases a tracker.”

He went on to suggest that there is little chance of an interest rate rise soon, since the Bank of England has just extended its quantitative easing programme again.

One lender that may be seeking to raise the popularity of its fixed-rate deals is Abbey.

It has just launched a new best buy two-year fixed deal at 3.69 per cent, with a loan-value of 70 per cent and an arrangement fee of £799.

This deal is available for both purchases and remortgages.

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