Fixed-rate mortgage 'popularity declines'

Date:Friday 20th November 2009
Author: Max Freedman

In October, just 26.3 per cent of the market chose fixed-rate mortgages, according to figures released in the John Charcol Index.

The low number of fixed-rate mortgages taken out contrast to the high level of popularity they saw in June this year, where they peaked at 81.3 per cent.

First-time buyers made up 15.3 per cent of the business that the lender saw last month.

Drew Wotherspoon from the mortgage advisors said: "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 added that if long-term rates stay at present values there appears to be a prospect that borrowers on a variable rate of two per cent, which is lower than the current Bank of England Rate, will switch to a similarly priced fixed-rate policy later.

The company suggested earlier in the month that the mortgage rates had been kept at lower levels by the stability of savings rates.