Fixed-rate mortgages prove popular

Posted 2008-05-20

Five-year, fixed-rate mortgages are increasing in popularity, it has emerged.

Abbeys latest mortgage index shows that demand for fixed-rate deals has grown for the fifth consecutive month, with 30 per cent of buyers questioned saying they would opt for such a mortgage.

It has been anticipated that much of this demand comes from people who are coming off fixed-rate deals this year, with Financial Services Authority figures showing 1.4 million homeowners are due to complete fixed-rate deals in 2008.

The bank has attributed the enthusiasm for fixed mortgages to the financial certainty they provide, especially after the Bank of Englands decision to hold interest rates at five per cent in May.

Phil Cliff, Abbey mortgage director, added: "Opting for a longer-term fixed-rate mortgage will provide mortgage borrowers with financial security in uncertain economic times."

Meanwhile, it was previously reported that self-build mortgages are still available, with homebuilding.co.uk claiming that this is because such homes tend to benefit up to 25-30 per cent in terms of equity.

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