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Fixed rate mortgage popularity grows

Fixed rate mortgage popularity grows

Category: Mortgages

Updated: 15/12/2011
First Published: 15/12/2011

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The popularity of fixed rate mortgages continued to rise in November and climbed to its highest level since March.

Some 37.4% of mortgage loans taken out last month were fixed rate deals, according to the latest data from John Charcol.

This compares with the proportion of 31.5% seen in October, and the 2011-low of 24.4% seen in July.

It is also the largest proportion reported since almost half (49.3%) of borrowers opted to fix their rate in March.

The data also revealed that clients of the broker have been opting for longer-term deals, in excess of two years, avoiding the need to frequently remortgage.

"Term trackers, in light of predictions for the bank rate increase being put back to the early part of 2014, and continuing concerns over the availability of future credit, are particularly popular," said Simon Collins, product technical manager at John Charcol.

"It is our belief that these offer better value than the vast majority of two year deals that switch onto a managed standard variable rate at the end."

Elsewhere amongst the figures it was revealed that applications in relation to house purchase were up slightly on the previous month.

Accounting for 57% of business submitted, the figure was also over 10% higher than a year earlier.

"Despite approaching the festive season, we have seen the number of good quality purchase enquiries hold up very well, so whilst the market's not great, it's not as bad as it's being painted," said Simon Collins.

With landlords seemingly keen to make the most of property investment opportunities, buy-to-let purchase business was also significantly up on last year.

"Landlords appear to be gearing up ready for an assault in the New Year to snap up some winter bargains while overall market sentiment remains low," added Simon Collins.

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