Huge rise in number of cheap five-year fixed-rate mortgages
According to the most recent figures from the Council of Mortgage Lenders, fixed-rate mortgages declined for the fifth month in a row, with a low of 65 per cent of products chosen. This trend, the CML say, will continue.
Switching lenders and choosing a remortgage can be expensive, particularly as lenders have increased arrangement fees in the last few years. This could partially account for a decline in the number of remortgages to 21 per cent in November. Tighter lending criteria could also be keeping borrowers in their loans .
The director general of the CML, Michael Coogan, reportedly commented: Each lender will make its own commercial decision on whether to change its SVR to follow a base rate move, depending on its risk profile, cost of funds, and business focus. As the credit crunch has affected businesses in different ways, this fragmentation of approach by different lenders should be expected until the market returns to more normal conditions later this year.
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