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Mortgage borrowers eye short term deals

Mortgage borrowers eye short term deals

Category: Mortgages

Updated: 01/06/2010
First Published: 01/06/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Short term fixed rate mortgage deals are set to prove most popular with homeowners during the second half of the year, new research has revealed.

According to a poll by NatWest Intermediary Solutions, 41% of financial advisers expect fixed rate mortgage deals of three years or less to top the best selling mortgage charts over the coming six months.

Three in ten (30%) believe that long term fixed rate mortgage deals of five years or more will prove the most popular amongst borrowers.

However, only a fifth of those surveyed (20%) thought that tracker mortgage deals would be the best selling mortgage products in the coming months.

The news comes after revealed that rates on short term fixed rate mortgage deals had dropped to their lowest level for 15 months.

The average rate on a two year fixed rate mortgage now stands at 4.61%, significantly better for borrowers than the high of 5.21% seen since March last year when the Bank of England cut base rate to 0.5%.

The drop in the average rate represents a £52 per month reduction in mortgage repayments for borrowers with a £150,000 repayment mortgage.

The average three year fixed rate mortgage has also dropped, to 5.30%, down from a peak of 5.61%, equating to a saving of £28 per month.

Furthermore, the average five year fixed rate mortgage deal has dropped to 5.74%, down from 6.24%, a monthly saving of £46.

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