UK Money News
3rd December 2007
Long-term fixed-rate mortgages 'remain attractive'
Homebuyers in the UK could continue to embrace long-term fixed-rate mortgage deals as a means of buying their properties, it has been suggested.
According to industry commentator the Council of Mortgage Lenders (CML), when looking to compare mortgages UK buyers are showing an appetite for the deals.
Such products ensure a fixed level of interest is chargeable on an outstanding mortgage debt regardless of whether the interest base rate rises or falls.
Data collected by YouGov on behalf of the CML reveals that 42 per cent of consumers would choose a fixed-rate mortgage if they were selecting such help with finance now.
However, 46 per cent stated that if interest rates went down they would be less likely to choose such a deal.
Furthermore, the costs and difficulty involved in buying their way out of such deals make them less attractive, the council states.
Bob Pannell, CML head of research, commented: "In the absence of a major policy intervention from the government, the take up of long-term fixed rates looks set to remain relatively small for the foreseeable future.
"The most we are likely to see is some movement from short-term to medium-term fixed rates."
The interest rate has risen five times since August 2006 and stands at 5.75 per cent.
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