Fixed mortgages now in demand more than variable rate mortgages

According to new research from Abbey Mortgages, the demand for fixed rate mortgages is now much higher than for variable mortgages.

The demand for variable mortgages has nearly halved since the start of 2009 according to the research.

In May, 60% of borrowers stated they planned to fix their mortgage when they remortgage.

The Bank of England Base Rate is at an historic low at 0.5% and 73% believe that it has now reached the bottom; there is only one way for interest rates to go and that is up.

Most in demand is a 2 year fixed mortgage, although demand for 10 year fixed rate mortgages has doubled since January.

Director of Mortgages at Abbey, Nici Audhlam-Gardiner, commented ‘As mortgage borrowers realise that variable deals will no longer fall further, it seems that many are now trying to work out when rates will raise again and how long to fix their rate for.’

On Wednesday, 3 June, Abbey is launching new market-leading 4 year fixed mortgage at 4.59% with a £995 fee and 75% LTV for those remortgaging or buying a new home.

Abbey also has a range of other fixed products, including

• 3 year fixed at 4.09%
• 7 year fixed at 4.99%
• 15 year fixed mortgage at 5.38%

All these products are available for up to 75% LTV, a fee of £995 and a maximum loan of £250,000.

Abbey is part of Santander and it, along with Alliance & Leicester and Bradford & Bingley savings will all be rebranded as Santander by the end of next year.