Last hooray of the fixed rate bargain

Fixed-rate mortgages made up 71 per cent of all approvals in April, the latest Council of Mortgage Lending (CML) figures have shown.

The figure is two per cent up on March and 17 per cent up on the same period of 2005.

The growing popularity is due to the security fixed rate deals provide against the backdrop of a widely-tipped interest rate rise this year and a competitive buyers market.

Fixed rate deals are edging upwards however, as analysts’ previous hopes of a rate drop evaporate and the chances of recouping on low-cost mortgages recede.

Fixed rate mortgages have, unusually, offered the best rate of borrowing over the last eight months since the base rate of interest was cut by a quarter of a point.

“Today’s data confirms that the market is in good shape,” claimed CML director general Michael Coogan.

“The strong take-up of fixed-rate deals is encouraging because they give consumers confidence in their mortgage payments and allow them to plan ahead financially.”

The report also showed that loans for new purchases made up 46 per cent of the market in April, up on the 43 per cent seen in March but down on the 45 per cent of April 2005.

© Adfero Ltd

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