Monday, April 30, 2012
Against a backdrop of low and stable interest rates, *Defaqto
carried out some research on the availability of various types of
mortgage, which has shown:
- Fixed rate mortgages have increased from 49% to 68% of
available mortgages over the last five years
- Base rate tracker mortgages available have fallen from 27% to
17% of available mortgages during the last two years
- Two year fixed rate mortgages continue to be the most numerous
in terms of product availability and now make up 30% of available
- The number of long term (10 years plus) fixed rate mortgages
has plummeted from 151 in February 2008 to only nine now. In March
2011 there was only one available
- Lifetime base rate tracker mortgages have reduced from 12% of
available mortgages to only 2% over the last four years
David Black, *Defaqto's Banking Specialist,
"Two, three and five year fixed rates together with the two year
base rate tracker mortgages now make up 75% of the mortgage
products available from lenders."
"Prospective borrowers have to take a view on whether to pay a
premium for the certainty of a fixed rate mortgage or to take a
chance on suffering possible future rate increases with a base rate
tracker mortgage. Currently the average fixed rate mortgage has a
0.30% to 0.80% higher interest rate than the average base rate
tracker mortgage with the same initial rate period."
"When you're looking for a mortgage it's also worth paying
attention to the relative competitiveness of the lender's Standard
Variable Rate because these vary considerably, and as many
borrowers have recently discovered, it may be something you're
eventually stuck with"
*Defaqto is an independent financial research and software
company, specialising in collecting, researching and analysing
financial products and funds.