Fixed rate mortgages continue to gain popularity

Fixed rate mortgages continue to dominate the market despite further expected cuts in interest rates according to new research from Abbey Mortgages. In its monthly re-mortgaging tracker study, 35 per cent of people said they would opt for a fixed rate mortgage if re-mortgaging tomorrow – up 13 per cent from February when 31 per cent said they would fix.

Within this overall increase in the perceived attractiveness of fixed rate mortgages, five year fixed rate deals held the most appeal – 12 per cent said they would opt for a five year fix, up from 7 per cent in February. Tracker mortgages grew in popularity with 12 per cent of homeowners saying that they would opt for a tracker if faced with the decision of re-mortgaging.

The percentage of homeowners confused by the vast number of options open to re-mortgagers remains worryingly high, although this figure was down from 58 per cent in February to 49 per cent this month.

Nici Audhlam-Gardiner, Director of Abbey Mortgages commented: “The findings from our latest re-mortgage index show that the appetite for fixed rate mortgages remains high despite widespread agreement that rates have further to fall this year. We expect that economic uncertainty is contributing to this trend as people try to take control over their outgoings. Additionally, there are some good fixed rate deals to be had, for instance our 5-year fixed rate at 5.83% or our 3-year fixed rate at 5.79%.”