18 May 2005
Mortgage borrowers, still fearful of imminent interest rate rises, are opting for fixed-rate deals according to Mortgages Direct.
The mortgages and financial services provider found that 84 per cent of borrowers are choosing fixed-rate mortgages.
However, in comparison lenders are growing more confident that interest rates will drop in the near future.
The director of Mortgages Direct, Peter Gladdy commented on these findings by saying: "It is clear there is an overwhelming fear that interest rates will increase further."
Mr Gladdy continued: "The increasing popularity of short term fixed rate lending indicates that borrowers are nervous about imminent hikes in interest rates.
"However," he added, "they are evidently confident that stability will return in the longer term, as only a small percentage of borrowers are choosing fixed rates for five years and longer."
In April this year 74 per cent of borrowers opted for repayment mortgages while three and five-year discount variable rate mortgages were down by 20 per cent.
Meanwhile, the rates for two-year and five-year best buy fixed rate mortgages have decreased since this time last year.
And as for buy-to-let mortgages, these were down from 15 per cent in 2004 to just five per cent today.
Mr Gladdy commented: "There has been a lot of speculation that the buy-to-let market is wobbling.
"Our figures certainly support this and perhaps indicate that the buy to let industry may well have peaked."
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