Homeowners would opt to fix in uncertain market

Nearly four out of five (79 per cent) of homeowners, if they had to re-mortgage tomorrow, would choose a fixed rate mortgage over a tracker, according to research from Abbey.

Uncertainty in the market means only 18 per cent would opt for a variable or tracker mortgage, while the majority of those that would take out a fixed rate would opt for a short term two year fixed (40 per cent).

Mortgage Type - Percentage

2 year fixed at 5.69% - 40.3%
5 year fixed at 6.34% - 13.3%
10 year fixed at 6.24% - 16.3%
15 year fixed at 6.39% - 9.2%
2 year tracker at 5.99% (tracking at 0.24% above BoE base rate) - 7.5%

Flexible tracker 6.24% (tracking at 0.49% above BoE base rate) - 6.7%

Standard variable rate at 7.84% - 4.1%

Sue Hayes, Abbey Director of Mortgages, said: “Fixed rates have always been popular in times of uncertainty when people look to gather as much security as they can from their mortgage. We are offering some great rates having reduced our fixed rates on 18 September – so it is a good time to take out a fixed rate mortgage with Abbey.”

Currently the cheapest two year fixes from Abbey are available from a broker and are 5.69% with a 1,499 fee or 6.29% with no fee.