Consolidation debt loan mortgage

According to recent figures the popularity of five year fixed rate mortgages has risen for the third month in a row, reflecting consumers’ wishes to increase financial stability over the longer term and protect themselves against any future base rate rises over the coming years. In the past two and three year fixed rate deals have been the main fixed rate deals that consumers have opted for, but more and more are not opting for the slightly longer fixed rate term of five years.

The research was carried out by Abbey, and a survey of around one thousand mortgage holders revealed that around 30% would opt for a five year fixed rate deal if they were to remortgage tomorrow. The demand for five year fixed rate deals has risen sharply over recent months, rising from 7% in February to 12% in March, and then rising to 24% in April and to 30% in May. It is thought that these deals are in demand in particular from the thousands of people due to come off cheap fixed rate deals over the coming year.

One official from the Abbey said: “Opting for a longer term fix rate mortgage will provide mortgage borrowers with financial security in uncertain economic times. Whilst the May decision by the Bank of England was to maintain the base rate at five per cent, inflationary pressures mean that it is unlikely to fall again soon, and some commentators even think that inflation could lead to increasing mortgage rates.”

He added: “For borrowers who do want to fix for five years, there are some very competitive deals out there at the moment including Abbey’s 5.75 per cent product available up to 75 per cent loan to value.”