Variable rate mortgages 'still popular'

The mortgage market is still being dominated by products with a variable rate, according to new research.

Independent mortgage broker John Charcol's figures for March reveal that 84 per cent of all lending for properties consisted of variable rate deals, due to the large premium on fixed-rate options at the moment.

The company also suggested that the predicted static movement of the Bank of England base rate was also contributing to the popularity of the mortgages, which have continued to out-sell fixed-rates since late 2009.

Drew Wotherspoon, director of marketing at John Charcol, said: "During March the difference between comparable variable and five-year fixed-rates was around 2.5 per cent, so the right advice for most clients was to float and not fix."

HSBC recently launched a new split loan mortgage which allows people to fix 25 per cent, 50 per cent or 75 per cent of their loan and have a tracker rate linked to the Bank of England base rate for the remainder.

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2010-04-28 13:36:06 © Moneyextra.com