More borrowers looking to fix

The number of borrowers who opted for fixed-rate deals last month reached record levels as more and more homeowners sought stability in the face of uncertain market conditions, the Council of Mortgage Lenders (CML) has said.

Nine in ten prospective homeowners chose to take out fixed-rate products, the CML advised, in comparison to 83 per cent who did so a year ago.

Similarly, existing householders taking out a new mortgage in order to move homes were also increasingly fixing their loans in July, with 76 per cent doing so in comparison to 63 per cent 12 months beforehand.

"Facing another rate hike, it is logical that new buyers are seeking to protect themselves by opting for fixed rather than variable mortgage products," commented Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (Rics).

The government has recently recommended that lenders offer more long-term fixed-rate deals in an effort to limit scenarios such as that likely to take place this autumn, when many borrowers will come off two-year fixes to be faced with far higher interest rates than they had previously enjoyed.


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