A new analysis of mortgage approvals suggests that British homeowners are increasingly opting for longer fixed-term deals.
The news comes amid concerns that the Bank of England will move to increase interest rates in the coming months, despite having decided to hold its base rate at 0.5 per cent at its Monetary Policy Committee (MPC) meeting last Thursday.
According to an analysis carried out by Telegraph Money, homebuyers and re-mortgagers have already begun moving to secure five and 10-year fixed rate deals in a bid to protect themselves from future interest rate increases.
In fact, its analysis reveals that five year fixed-term deals made up more than half of all mortgages approved by London & Country last month, while online broker Habito has seen a steady increase in five year deals each month throughout 2018.
Commenting late last week, David Hollingworth, of London & Country, said: “Even though the Bank’s rate didn’t rise this week, the tone of the Monetary Policy Committee is shifting towards a need for rates to increase.
“Some borrowers may feel that they’ve heard it all before when lower, shorter-term rates would have done them little harm in a benign rate environment. However the shift toward more five-year rates does suggest that there’s an understanding that locking in at the low can have considerable benefit in the longer run.”
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