Despite the fact that interest rates are predicted to decrease over the next year, 2.5 million people would opt to fix for five years, 1.1 million would fix for ten years and 1.5 million wanted to fix for fifteen years, the research said.
Demand for five year fixes even outstripped the usually popular two-year fixes. In summer, over 40% said they’d opt for a two-year fix, whereas just 12% of the home-owning population would now choose this option. Trackers were slightly up in terms of popularity, also at 12%, however this is still lower than the demand for five-year fixes.
Amongst the 8.8 million people who favored a fix, 5.7 million stated that regardless of the Bank of England base rate, they would like to know exactly what their monthly outgoings would be. A lack of understanding of tracker mortgages amongst homeowners was also identified, with around 700,000 saying that they preferred to fix because they didn’t understand tracker mortgages.
Nici Audhlam-Gardiner, head of mortgages at Abbey, said: For most of us our mortgage is the biggest financial commitment we make so it’s understandable that we want to know just how much we’re going to have to fork out each month.
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.
