Market trends shift back to fixed-rate mortgages

Date:Thursday 12th August 2010
Author: Susanna Kavka

Prospective homeowners have been shifting back to fixed-rate mortgage products due to a steady reduction in rates.

While tracker-rates have been a popular choice for some time, the gap between them has fallen recently, making fixed-rates more accessible again, according to Ray Boulger, senior technical manager at online mortgage broker John Charcol.

The decline in rates is down to investors estimating how long the Bank of England base rate will remain at 0.5 per cent and being to adjust accordingly, he explained.

"The gap between tracker-rates and fixed-rates has fallen over the last few months, mainly because the cost of fixed-rates has fallen, but also partly because quite a few lenders increased their tracker-rates," Mr Boulger added.

His comments follow the most recent statistics from the Council of Mortgage Lenders, which noted that 48 per cent of mortgages taken out by first-time buyers during June were fixed-rate deals.