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Fixed rate mortgages remain most popular

Adam Williams
Written By:
Adam Williams
Posted:
Updated:
27/04/2015

Fixed rate mortgages continue to be the product of choice for borrowers, although more are turning to tracker and variable rates.

Figures from Paragon showed long-term products were increasing in popularity with 30% of mortgages in the first quarter of the year taken out for five years or more.

At the same point, there was a drop in two and three year terms with these falling from 71% to 66% of the market.

The vast majority of mortgages were taken out on a fixed rate basis with more than four in every five mortgage brokers recommending this kind of loan.

However, tracker products are growing in popularity and made up 18% of cases in the first three months of 2015. This has risen from 15% in the final quarter of last year.

Mortgage advisers are feeling more positive about the future of the market, the survey reported.

Paragon’s managing director John Heron said borrowers were looking to lock in for longer periods of time.

“The gap between fixed rate and tracker rate sales widened significantly from the start of 2012, and it is not since 2010 that we have seen tracker and fixed rates selling in equal numbers,” he said.

“Whilst concerns over imminent increases in interest rates may have abated, it is clear that landlords are continuing to take a cautious approach by selecting fixed rates in much larger numbers and over longer periods.”