Jittery home-owners are taking refuge in fixed-rate mortgage deals as analysts predict an upward swing in the base rate of interest within the next year, says My Mortgage Direct.
The number of fixed-rate deals eclipsed the number of tracker deals sold over the past three months, said Cath Hearnden of My Mortgage Direct.
“With no Bank of England base rate rise for nearly a year now, borrowers are getting increasingly apprehensive of a rate hike as each month goes by,” she said.
While older home-owners may be able to recall far wider and higher fluctuations in the base rate, people who have bought homes in recent years have only known low rates.
The research suggested that fears of affordability problems were behind a ten per cent fall in the number of new buyers in the market, as would-be home-owners compare mortgage rate increases to their incomes.
“Rates are extremely low right now but for newcomers to the housing market, this is all they’ve ever known,” said Ms Hearnden.
“Talk of a rise of 0.5 per cent is viewed with concern and is scaring some people off taking on a mortgage that – they believe – could spiral out of their control.”
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