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Yorkshire borrowers choosing longer term fixes over tracker deals

28th August 2013 Print

More borrowers are choosing to fix their mortgage for five years, according to research by Yorkshire Building Society.

Since 2011, the proportion of mortgage deals lent  by the Society at a fixed rate for five years has risen by almost a quarter (24%), as borrowers seek out longer-term security to help them better plan their monthly budgets. The proportion of two year fixed rate mortgages has fallen slightly.
Over the same period, tracker mortgages have fallen in popularity by half and borrowers now are choosing a five year fixed rate mortgage over a tracker mortgage by a rate of almost six to one compared to two years ago.
"We've seen a rise in the popularity of longer-term fixed rate mortgages with borrowers for some time now and this shift has escalated during 2013," said Yorkshire Building Society product manager Brendan Gilligan.
"While the Base Rate has remained at its historic low many borrowers want to lock in to as competitive a deal as possible to protect themselves against potential rate rises in the future.
"Borrowers are less likely to choose a tracker as potential short term savings are outweighed by the security of fixing their biggest monthly outgoing when other costs such as food and utility bills keep going up."
Yorkshire Building Society currently offers best buy five year fixed rate products, at 2.79% for mortgages up to 65% LTV (loan to value), with a £345 fee and £500 cashback; and at 3.89% for mortgages up to 85% LTV, with a £845 fee.

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