Money News
Mortgage lenders should brace themselves for high demand for 5-year fixed rate mortgages, according to the latest research from the Abbey Mortgage Index. In a study of almost 1,000 borrowers, 24% said they would opt for a 5-year fixed rate deal if they were to remortgage tomorrow.
The findings come amid reports of a shrinking mortgage market. Indeed, according to a recent report there are 60% fewer mortgages available now compared to the month prior to last year's credit crunch.
Abbey's research suggests that borrowers are increasingly looking for certainty over a longer period of time with 2-year fixed deals now trailing well behind 5-year deals in popularity.
Just 1 month ago, as few as 10% of borrowers said they would choose a 5-year fix if remortgaging tomorrow, but this has more than doubled this month to 24%. Meanwhile, 2-year fixed rate mortgages are now only marginally more popular than a month ago with an increase from 7% to 10%.
Despite reports that borrowers may ride out current uncertainty on SVR deals, the research shows that just 2% of borrowers would opt for their lender's SVR if remortgaging tomorrow.
Meanwhile, the amount of people who would opt for any type of fixed mortgage product has increased from 35% last month to more than half this month (53%). Tracker mortgages, on the other hand, have taken a dive in popularity - the number of people opting for this type of loan dropping to just 5%, compared to 12% last quarter.
07 April 2008 © Moneyextra.com
Moneyextra.com recommends you should consider taking independent financial advice before acting on any article. Please contact us for help with your individual circumstances if any assistance is required.