Three year fixeds most popular

Published:
02 September 2008
Topic:
News,Money,Mortgages

A fifth of homeowners are choosing three-year, fixed-rate mortgages compared with 9% for two-year deals and 8% for five-year deals, according to a study in August by Abbey Mortgages.

The decline of five-year fixed rates from 22% in July suggests that borrowers are now more optimistic of mortgages remaining affordable over the short term.

Abbey`s research also shows that demand for tracker mortgages has remained the first choice for 11% of homeowners compared with 10% in July and 12% six months ago.

Overall, fixed rate mortgages are increasing in popularity, attracting 52% compared with 47% last month and 35% six months ago.

A large number of homeowners claim they are unsure about which mortgage they would choose if they were to remortgage. Just over a third said they don`t know, compared with 41% last month.

Phil Cliff, director of Abbey Mortgages, said that recent rate cuts had inspired the confidence in borrowers.

"Deals such as our three-year fix at 5.69% are proving very popular as mortgagors opt for the middle ground between the short two-year fixes and committing to a five-year deal," he added.

Copyright © PA Business 2008

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