Popularity of fixed-rate mortgages continues to increase
Published On 8 April 2008
Consumers are increasingly opting for fixed-rate mortgages, a new study has shown.Charcol's March Mortgage Monitor showed that 64 per cent of borrowers opted for fixed-rate mortgages in the month, up from 52 per cent in February.
Katie Tucker, technical manager for Charcol, explained that the increased demand for fixed-rate deals was slightly surprising, considering many people expect the Bank of England to cut interest rates at least once more in 2008.
She explained that the demand was "a sign of the turmoil in the markets" and continued: "Borrowers have prioritised the security of an affordable fixed rate [at] this time, over a high rate which has the potential of falling."
In addition, the study showed that fewer people opted for interest-only mortgages in March.
The research indicated that demand for these mortgages slipped from 49 per cent in February to 41 per cent.
"Property value is not expected to increase in the next few years, so most borrowers have realised that equity won't be naturally home-grown, and they must repay some capital monthly," Ms Tucker explained.
