Friday, February 22, 2008

50 per cent of borrowers take out fixed rates

When base rates were tumbling to record lows, record highs were seen in the take up of Uk Mortgages fixed rate deals. Everyone wanted to fill their boots with a low-low rate to give them peace of mind when the base rate started rising. In fact, the take-up of fixed rate mortgages has more than doubled in the last year.Some 50 per cent of mortgage borrowers opt for a fixed-rate product, according to the mortgages director at Legal and General.The reason for this is that Council tax, utility bills and household costs have risen by more than a third in the past four years contributing to a nervousness amongst borrowers about their debt to income ratio. This resulted in a "higher than expected" number of people choosing the security of a fixed-rate mortgage.
Gordon Brown says mortgages running for such lifelong terms will help avoid the dreaded 'boom and bust' economy cycle.
I myself have taken fixed rate loan for 6.5% for a period of 10 years.