Fixed-rates 'not necessarily the best option'

According to the Council of Mortgage Lenders, over three quarters of all mortgages taken out in May were fixed-rate products– but variable mortgages may now offer better deals, new research from mform.co.uk suggests.

The lender has revealed that the ten best discount deals currently provide better value than their fixed equivalents, with a corresponding rise in the number of borrowers turning to such products.

Fifty-eight per cent of mform customers opted for a variable deal in July, the study added.

"Recently mortgage customers have understandably gone for certainty in the face of rate rises and that has meant fixed rates have dominated the market," acknowledged mform marketing and business development director Francis Ghiloni.

"But in July we have seen the trend reversed when customers have seen the true costs involved," Mr Ghiloni acknowledged.

The government has recently been emphasising the benefits of longer-term fixed-rate deals, with chancellorAlistair Darling saying such products were better than their short-term counterparts in ensuring a borrower's financial stability.


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