Huge rise in number of cheap five-year fixed-rate mortgages
Borrowing patterns over the past three months show that there has been a big rise in the number of tracker-based mortgages .
In contrast, five-year fixed rate deals appear to be on the way out.
The data comes from My Mortgage Direct's new quarterly UK mortgage borrowing trends survey.
Tracker based mortgages were the dominant choice for 80 per cent of borrowers arranging their loans through brokers in January of this year, compared to just 20 per cent of applicants opting for fixed rate deals, said MMD joint director Cath Hearnden.
But lenders have begun to roll out more competitive discounted rates in recent weeks, prompting a renewed interest in variable rate discounted deals, plus a noticeable rise in the volumes of fixed rate mortgages being arranged in March, added Ms Hearnden.
As for borrowers' attitudes, more are seeking flexible, variable rate deals.
More lenders are coming into the market with this type of product - it is an area where borrowers appear to be becoming more sophisticated, observed Ms Hearnden.
The MMD survey discovered there was a surge in interest-only based mortgages in the last three months; something it feels has been prompted by people beginning to feel the pinch of the interest rate hikes.
The number of interest-only mortgages rose dramatically in the last three months, from 29 per cent during the same period in 2004 to 60 per cent this year.
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