Abbey launches new ten-year fixed rate mortgage

Latest figures from the Abbey Remortgage Index shows that demand for longer-term fixed-rate deals remains strong. Five-year fixes are by far the most popular option, with 27 per cent of people saying that if they took a remortgage deal tomorrow they would choose a five-year fix. This makes it more than twice as popular as the next most popular type of mortgage, the three-year fix.

People's horizons are getting even longer. The number of people saying they want a ten or fifteen-year fix has risen to 11 per cent after a dip in the spring - the same number as those who would choose a three-year deal. This comes as Abbey launches a new ten-year fixed rate mortgage, with a market leading rate of 6.24 per cent and 999 GBP fee, for up to 75 per cent loan-to-value. The deal will be available from Friday 4 July.

The three-year fix has also grown steadily in popularity since the start of the year, although at a slower rate than the five-year fix. In February just 3 per cent said they'd remortgage to a three-year fix, whereas in June this had grown to 11 per cent.

Phil Cliff, Director of Abbey Mortgages, comments: "The Abbey Remo Index gives a really interesting insight into the minds of homeowners at the moment. The credit crunch seems to have instilled a longer-term vision among homeowners who want to make sure they are well and truly out of the 'crunch' period when they remortgage again. Those who do want to fix for the longer-term are well serviced by Abbey. Our new ten-year fixed rate deal is the best in the market at 6.24 per cent and our five-year fixed rate deal is also competitive at 6.49 per cent."

Variable rate deals

June's figures also show that while the percentage of people who would choose some sort of tracker or flexible deal (including SVR) remains comparatively low at 10 per cent, the demand for 2-year trackers in particular has doubled over the last two months.

However, this so far has been outstripped by the number of people who would opt for any type of fixed mortgage product. This has increased steadily, with the figure in March standing at 35 per cent and in June at 60 per cent.