Abbey National is bringing a 10 year fixed rate mortgage to the market this week aimed at bringing peace of mind to buyers concerned about changing interest rates.
Recent studies have shown that longer period fixed rate mortgages are more popular with consumers, the 5 year versus 3 year fixed rate options proving this point very well. The move by Abbey National to bring in a 10 year fixed rate option is hoped to win more buyers over to the idea, especially as the interest rate is just 6.24 percent. There is an initial fee of GBP999 but this still represents excellent value whilst providing the security that homebuyers crave.
This longer period has impressed industry commentators too since it is expected that Abbey National mortgage customers taking out this option will not be left to face dramatically higher interest rates when the term ends, which is what is happening right now as the plethora of 2 year fixed rate mortgages come to an end.
A survey carried out by the Abbey National mortgage department suggests that the general view is of house prices stopping their fall within the next 12 months.
Speaking to estate agents the Abbey National found 61 percent of them believing that the prices would bottom out within 12 months, while the majority of homeowners expect it to be even quicker, the concensus being around 7 months. Even the most pessimistic homeowner cannot envisage price falls lasting longer than a year.
With this market view in mind around 80 percent of property owners are happy to wait and let the prices fall a little more before committing to a move. The Abbey National also found a small number of people planning to make the most of the price falls by stepping in to buy and grab a bargain.
For the third month in a row the Abbey National Mortgage Index has shown a rise in the appeal of five year fixed rate mortgages to consumers.
From the survey carried out by the Abbey National there has been a 6 percent increase in those ready to go for a five year fixed rate mortgage if they were remortgaging tomorrow. The figure stands at 30 percent this month, compared with 24 percent and 12 percent in the two months previously.
A lot of the interest in these mortgages will be coming from those with existing fixed rate deals that are set to expire say the Abbey National. Having already enjoyed the security of a fixed rate mortgage these customers will take another one given the opportunity.
Find the best deal on a fixed rate mortgage at Moneygossip.co.uk.
