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Wales top location for fixed rate mortgages

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Borrowers in Wales favour fixed rate mortgage products more than those in any other area, market data has shown.

Some 95.3% of all mortgages taken out during February in Wales were on a fixed basis, although the number of people opting for a variable rate is rising.

Mortgage Advice Bureau’s national mortgage index found the highest percentage of variable deals was completed in the month since November 2012.

Across all areas of England and Wales one-in-ten (10.1%) of borrowers chose a variable rate product during February, up from 8.6% in January.

Borrowers in London were the least likely to fix, with 16.6% of borrowers in the capital opting for variable deal.

The survey said borrowers felt the Bank of England base rate was unlikely to rise in the near future, meaning there was little risk when taking out a variable deal.

Borrowers remortgaging to a new deal were the most likely to apply for variable products in February, with 12.8% doing so compared with 9.0% of homebuyers.

Brian Murphy, head of lending at Mortgage Advice Bureau, said: “While fixed rates remain the majority preference as people put their finances on a stable footing, it is no surprise that the lower rates available on some variable deals are attracting more interest.

“Comments from the Bank of England have clearly inspired confidence that low rates are here to stay for the foreseeable future. Some homeowners and buyers may feel there is still a window to make a short term saving through cheaper variable rates, and then lock in at a later date around the time of the first rise.”

“Homeowners and buyers in London often have more spending power behind them, which can give them extra confidence to seek a saving through cheaper variable deals and accept the chance that rates may rise and negate the benefits.”

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