Rate rises prompt fixed-rate trend

Consumers are playing it safe when taking out a mortgage in the current climate by opting for a fixed-rate product, an industry body has revealed.

The Council of Mortgage Lenders (CML) has noted that there has been a marked trend towards fixed-rate products in recent months.

According to CML statistics, a record number of first-time buyers opted for a fixed-rate mortgage in June.

Around 90 per cent of all mortgages taken out in that month were some form of fixed-rate product.

Home-movers, as opposed to first-time buyers, are also opting for fixed-rate mortgages, with a record 76 per cent of home-movers taking one out in June.

A CML spokesman said the trend reflects a desire for surety on the part of the borrower because “what it allows first time buyers or home movers to do is actually know exactly how much they’re paying out each month on their mortgage“.

“It gives them that payment certainty,” he added.

The Bank of England elected not to raise the interest rate again in August, but many analysts expect to see another rise before the end of the year.

© Adfero Ltd

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