More buyers opting for fixed-rate mortgages

Posted: 14 Mar 2007 15:14:42 GMT

First-time buyers are increasingly opting for fixed rate mortgages, as uncertainty over rises in the Bank of England base rate continues.

First-time buyers are increasingly opting for fixed rate mortgages, as uncertainty over rises in the Bank of England base rate continues.

Research from the Council of Mortgage Lenders suggests that 85 per cent of first-time buyers decided on a fixed rate mortgage last month.

Average interest on a fixed rate mortgage is currently 5.27 per cent, slightly above the base rate of five per cent and 72 per cent of all new loans taken out in January were fixed rate.

The Bank of England raised interest rates by a quarter of a per cent in January, but since that time rates have remained static.

However, analysts predict that there could be another rate rise announced within the next few months.

CML director general Michael Coogan said: "Each month it seems that the prospect of another interest rate rise is balanced on a knife edge."

"More and more borrowers are protecting themselves against this risk and choosing the certainty of fixing their monthly mortgage payments, which allows them to plan ahead with confidence."

These results suggest that first time buyers are increasingly knowledgeable about their mortgage options and are taking advantage of the most favourable deals.


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