Interest in 10-year fixed rates surges

The number of internet searches for fixed rate mortgages rocketed by 888% in the three months from April to June 2010.

According to credit reference agency Experian’s data, the burgeoning interest in longer-term fixed rates is evidence of a growing desire among mortagge borrowers to secure the interest rate they are paying before the Bank Base Rate rises from its current historic low of 0.5%.

Searches for ‘fixed rate mortgages 5 years’ rose by 602% compared to a year ago, while searches for ‘tracker mortgages’ only saw an increase of 16%, suggesting that the security offered by fixed rate deals is becoming more appealing.

The analysis also revealed that searches for property for sale rose by 25% in the second quarter of 2010 compared to the same period in 2009, while searches for rental property were up 22%.

Experian said that these trends indicate strong buyer interest combined with improved affordability due to the low interest rate environment.

Charlotte Hogg, managing director of Experian, UK and Ireland, said:

“Internet searches for fixed rate mortgages have increased dramatically compared to last year. Although interest rates are still at a record low, our analysis shows that consumers are thinking about how they can capitalise in the long term by minimising the effect of future rate increases and taking action now to protect themselves.”