29 Jun

'Confusing time' for mortgage customers

'Confusing time' for mortgage customers

Many homeowners moving into a new property and taking out a mortgage are confused about the type of loan they should choose, it has been claimed.

The previously preferred option of a fixed-rate deal is no longer as popular, something demonstrated by Mortgageforce's figures.

Around 75 per cent of its customers had been opting for fixed rates, but this number has now dropped to 64 per cent.

Furthermore, the firm expects next week to be especially confusing for customers as the significant price difference between the two makes it difficult for them to ignore the cheaper option.

Katie Tucker, technical manager for Mortgageforce, said that "the lenders have to keep their split between customers on fixed rates and tracker rates even, to mitigate the risk of their own wholesale costs rising".

Yesterday, Legal & General revealed that 87 per cent of residential home owners are now opting for a fixed-rate loan, compared to 71 per cent in the first quarter of 2009
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