21 May

Demand for five-year mortgages increases again

Demand for five-year mortgages increases again

The latest Mortgage Index from Abbey has found that the demand for five-year fixed-rate mortgages has grown for the third month in a row.

When asked by the bank what product they would opt for if remortgaging tomorrow, 30 per cent of respondents said they would go for a five-year fix, up from 24 per cent the previous month and 12 per cent in April.

Meanwhile, Britain's appetite for two and three-year fixed-rate mortgages remained steady at eight and nine per cent respectively.

The bank suggested that much of the demand could be originating from the 3,835 people coming off fixed-rate deals this year.

"Opting for a longer-term fix-rate mortgage will provide mortgage borrowers with financial security in uncertain economic times," Abbey's mortgage director Phil Cliff commented.

This latest news comes after Abbey announced last week that it was reducing the rate on its five-year fixed mortgage for borrowers with a loan-to-value ratio of 75 per cent and under to 5.75 per cent.

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