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.
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A review of the current mortgage market by Legal and General shows that the fixed rate mortgage is still very popular with consumers despite the recent rate rises they have experienced.
Legal and General have looked at the differences in mortgage choices between Quarter 1 and Quarter 2 of this year, seeing where the key trends are. Fixed rate mortgages fared very well, going up from 35 percent of the market in Q1 to 58 percent in Q2. This was achieved even though interest rates went up, on average, to 6.51 percent from 5.87 percent on the popular 2 year fixed rate mortgage.
The market for mortgages is going to remain very keen on fixed rate products it seems due to the expectation of increased mortgage costs in the future. House buyers want a level of security say Legal and General, something that a fixed rate mortgage provides as the repayment amount will not be affected by base rate changes.
Alliance and Leicester has announced a new tracker mortgage with a headline rate of less than 6 percent.
The new Alliance and Leicester mortgage is a two year base rate tracker with a 5.98 percent headline rate and a maximum loan to value of 75 percent. There is an arrangement fee of just under GBP1,000 and borrowers can take up to a maximum of GBP1 million.
The typical two year fixed rate mortgage rate has just gone over 7 percent so this sub 6 percent figure is certain to attract keen interest. It offers a real alternative for customers and shows them that the Alliance and Leicester are really doing what they can for customers.
