A new study has found that consumers are seeking fixed mortgages in rates never seen before. Even though rates for fixed mortgages are a bit high right now, consumers seem to prefer the stability that this type of loan can offer. The bad press surrounding variable rates may also be driving more to seek a fixed mortgage in hopes of keeping their payments at a set rate for the life of the loan, so that there are no questions.
The director of fairinvestment.co.uk, the company that sponsored the research, James Caldwell, said: “Our research was surprising considering how high mortgage rates are in the current market. For 25 per cent of our respondents to say they would choose a short term year fixed-rate (up to five years), despite the fact they are unlikely to find a rate under 7 per cent, suggests that people do not have much confidence in the chances of the mortgage market recovering within the next five years.”
City commentator and chairman of stockbrokers Collins Stewart, Terry Smith warned that: “We are nearer the beginning than the end. I’m afraid there is going to be more pain – quite a lot, actually.”
Related reading: Fixed Mortgage
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