Consumers 'taking a bet on fixed-rate mortgages'

Date:Monday 3rd August 2009
Author: Susanna Kavka

The number of remortgages that were approved by lenders in June rose because consumers were taking a bet on fixed-rate products, it has been claimed.

According to figures produced by the Bank of England, 35,011 remortgages were approved during the 30-day period.

This was a rise from the 31,874 recorded in May.

Responding to the figures, Andy Pratt, chief operating officer at Alexander Hall, said they show that people believe interest rates are soon to go up.

He commented: "The majority of that will be due to consumers taking a medium-term view that interest rates are going to go up and then looking to fix accordingly.

"That is ultimately a bit of a bet as to how long it takes before interest rates return to high levels."

Mr Pratt went on to say that, while variable rates are currently very low, fixed rates offer greater long-term stability.

He concluded that choosing between the products is a "trade-off".