Homebuyers choose fixed-rate deals

24/10/2007

Homebuyers are taking on fixed-rate mortgages simply because interest rates are rising each year.

New research carried out by moneysupermarket.com shows that many homebuyers are opting for three to five-year fixed mortgages.

Nobody can control the market Cuming suggests; there is still doubt among homebuyers, particularly with the latest credit crunch.

Head of mortgages, Louise Cuming at moneysupermarket.com, commented: 'People are now looking for longer peace of mind and the research supports the lack of confidence they have with interest rates.'

Conventionally, short two-year fixed rates have always been popular, generally because lenders present the finest rates over this time. However 21% are opting for one to two-year fixes compared with 27 per cent for 3-5 year deals. The amount is even greater for first-time buyers who rate this medium-term security.

Managing director from Mortgage Force, Rob Clifford spoke further: ‘Rates are only around 6% even for five years of security you can see why first-time buyers are grabbing as long a period of guarantee as they can.’

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