Fixed rate mortgages rule the roost
Fixed rate mortgages are growing increasingly popular with homebuyers, new research has revealed.
According to the latest figures from Yorkshire Building Society, the ratio of fixed rate to variable rate mortgage applications on its books rose to 64:1 in October – almost double the 35:1 ratio recorded in August.
Commentators have suggested that more and more homebuyers are being drawn to fixed rate deals amid mounting fears that an interest rate hike could be just around the corner.
Speaking to the BBC back in September, Mark Carney, Governor of the Bank of England, said that a rate rise in the “relatively near term” was “inevitable.”
Since then, fears have been growing that the Bank will imminently hike the base rate from its current record low of 0.25 per cent at its Monetary Policy Committee (MPC) meeting due to take place on Thursday 2 November – a move which could have a significant impact on the monthly payments of homeowners with variable rate mortgages.
“Despite having the lowest ever variable rate mortgage on the market, our findings demonstrate that borrowers value being able to lock-in to a fixed rate deal and know that their monthly payments won’t change during their initial term,” a spokesperson on behalf of Yorkshire Building Society said.
“With increasing speculation that the Bank of England could trigger a rate rise this week, our data indicates borrowers are keen to secure a deal before any potential increase,” they added.