26 Oct

Buyers returning to variable rate mortgages

Buyers returning to variable rate mortgages

Homebuyers are opting for variable rate mortgages in increasing numbers, new research has revealed.

According to figures from a survey conducted by Spicerhaart Financial Services, 19 per cent of borrowers took out variable rate mortgages in September.

The previous month, the figure had stood at 13 per cent.

This means that the number of variable rate mortgages being approved has increased for the third month in a row.

The upward trend follows the Bank of England's decision to hold interest rates at 5.75 per cent, and is indicative of the widespread perception that this figure represents a peak.

"The further decrease in demand for fixed-rate products, with consumers turning instead towards variable mortgages, demonstrates that borrowers now believe that interest rates have finally peaked," commented Steve Cox, operations director of Spicerhaart.

"The proportion of borrowers opting for longer term fixed-rate mortgages, of between seven to 25 years, remains relatively stable, but fixed two-year products have seen the biggest drop, suggesting that borrowers expect an imminent drop in interest rates."


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