Among all respondents in the UK a quarter said that nothing would induce them to take a longer term fix. But significant factors that would encourage many people to choose a long-term fix were peace of mind in case rates go up and helping people to manage their household budgets. Fewer people cited reassurance about borrowing large amounts of money as a factor – but when asked whether people borrowing large amounts relative to their income should have to take out fixed rate loans to protect themselves against higher monthly payments, a significant majority of those who expressed a view felt that they should.
The research has also revealed that people might be more willing to take long-term fixed rate deals if they believed they could exit them more easily and at lower cost. 44% of respondents said they would be willing to pay up to a tenth more of their monthly mortgage cost to have the freedom to refinance at any time at no additional cost.
Bob Pannell, CML head of research, said: 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 and the most we are likely to see is some movement from short-term to medium-term fixed rates.
