Stability still the watchword for borrowers

Many mortgage borrowers are still eager to take out long-term fixed-rate mortgages despite the fact that interest rates are poised to fall, Abbey Mortgages has said.

The Bank of England is expected to cut rates by between 0.5 and 0.75 percentage points in 2008, but almost a third of respondents to Abbey's study said they would take out a fixed-deal that was at least five years long if they were to change mortgage now.

The main reason for such a choice was that borrowers want to know how much they will pay out each month, the responses revealed.

"You never know what's going to happen in the future, but at least if you've committed to a long term fixed deal, you know where you are going to stand with your repayments," said Abbey head of mortgages Nici Audhlam-Gardiner.

"Borrowers need to be sure however that the deal they take out is right for them and that they understand the different types of mortgages available before signing up to anything," Ms Audhlam-Gardiner added.

Chancellor Alistair Darling has also vouched for the stability provided by long-term fixes in recent months.

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