Fresh data from the Mortgage Advice Bureau shows that 96% of homebuyers choose to fix during September. This was the second successive month that this figure was achieved, which in turn pushed the popularity of fixed mortgages to new record high.
Borrowers are becoming more motivated to lock into fixed rate deals whilst the mortgage pricing remains at such a low.
Deals
In comparison, just 91% of homebuyers chose a fixed rate between February and April this year. More savvy homeowners are looking to secure rates in larger numbers, with 92% of remortgage customers fixing rates in August and September. This is the highest proportion recorded since June 2014, when 93% chose to fix.
There were increases in the average mortgage pricing across two and five year fixed rates and two-year tracker rates. The average two year fixed rate increased from 2.68% in August to 2.72% in September, marking the first rise after 12 months of consecutive lows. Five year rates also increased for the first time since August 2014.
Despite rising between August and September, two year fixed rate pricing remained the most improved over the previous year. Borrowers looking for a short-term two year fix in September found the average rate more than 1% lower than it was twelve months previously, allowing them to make substantial savings on their repayments.
Products
Additionally, the total number of mortgage products available rose to a new record level in September, with 16,465 recorded. This represented a rise of 4% in August and a 36% year-on-year increase.
The head of lending at the Mortgage Advice Bureau said, ‘sooner or later, the predictions of an interest rate rise are going to become a reality and some lenders have started to act ahead of this to ensure they are not short changed. Borrowers should not be too alarmed by September’s jump in pricing, as there was only a slight increase and three year fixed rates continued to fall. All the same, it is a timely wake-up call that these rates are not here to stay forever.’[1]
Anyone in a position to buy or remortgage should consider making the most of the competitive pricing and thousands of products currently available. There are clear signs in the latest data that an increasing number of borrowers are cottoning onto the trend,’ they added.[1]
[1] http://www.propertyreporter.co.uk/finance/rising-rates-push-96-to-fix.html