Fixed-rate mortgages 'rising in popularity'

Date:Friday 12th June 2009
Author: Susanna Kavka

Homeowners in the UK are increasingly opting for fixed-rate mortgages, it has been found.

Figures produced by the Council of Mortgage Lenders (CML) suggest that 69 per cent borrowers took out such loans in April of this year.

This was said to be the highest share since June 2008.

The CML also revealed that the average fixed-rate mortgage charged interest of 4.83 per cent over the month.

Head of research at the organisation Bob Pannell commented: "With the interest rate cycle now at its floor, an increasing proportion of borrowers are taking out fixed rates, including for longer-term periods of five to ten years."

He went on to suggest that, with expectations for the base rate to remain low in the near future, shorter-term fixed-rate home loans are not as appealing as cheap variable-rate deals.

Statistics released recently by Mortgageforce suggested that 56 per cent of the mortgage deals it was involved in last month were for terms of three years or longer.