Eight out of 10 borrowers looking for a fixed rate mortgage
Borrowers want certainty of payment in the current climate, with eight in 10 looking for a fixed rate mortgage, said Moneyfacts.
The financial information provider said they want ‘the ability to budget and the protection from future interest rate volatility that these can provide’.
Borrowers coming to the end of a fixed rate mortgage will find cheaper deals available now than when they got their existing deal, meaning they could save money by remortgaging.
Those with five-year fixed rate mortgages from 2016 now maturing will find that, at 2.63%, the average overall fixed rate is 0.41% less than when they secured their existing deal.
The average rate for two-year fixed mortgages at 2.38% is 0.08% below where the equivalent rate was in September 2019.
Darren Cook, spokesperson for Moneyfacts, said: “A vast majority of potential new mortgage holders may be more risk-averse in the current economic climate.
“Currently, just under nine in ten (87%) of all fixed rate mortgages available on the market are either two or five-year initial rate deals, so mortgage providers are recognising consumer sentiments in these two sectors, as analysis shows that 36.18% of consumers are looking for a two-year fixed rate mortgage and 28.40% are searching for a five-year deal. Longer term financial stability may also be in the forefront of consumers’ minds as the economy moves forwards, with 8.93% of demand taken up by those looking for a 10-year fixed rate mortgage.”