Borrowers want fixed rates

Posted: 08 Feb 2008 11:42:37 GMT

The majority of UK homeowners would rather be on a fixed-rate mortgage than a tracker, according to new research.

The majority of UK homeowners would rather be on a fixed-rate mortgage than a tracker, according to new research.

Abbey has revealed that around 10.3 million would prefer to have a fixed-rate deal, compared to just 2.8 million who would prefer a tracker-rate.

The most popular choice is to fix for two years, with eight per cent of those questioned preferring this option.

A ten-year fixed-rate deal is the next most popular, as seven per cent of homeowners said they would make this choice, while six per cent would opt for 15 years.

"The research suggests that continued talk of economic gloom has had two effects on borrowers – they are either determined to take the more stable option or are confused about the best mortgage option to take," commented Nici Audhlam-Gardiner, head of Abbey Mortgages.

"“There is continued interest in longer-term fixed-rate mortgages, reflecting customers' confusion in what will happen in the markets short-term, and also some fatigue with the two-year remortgage effort and costs.

"Borrowers need to be sure however that the deal they take out is right for them and that they understand the different types of mortgages available before signing up to anything," she added.

Mortgage borrowers received a boost yesterday (February 7th) when the Bank of England cut the base rate of interest to 5.25 per cent.

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