25 Aug

Fixed rates 'preferred option for borrowers'

Fixed rates 'preferred option for borrowers'

Fixed-rate deals are the preferred option for many borrowers, one property expert has asserted.

Michelle Slade, a spokesperson for Moneyfacts.co.uk, which aims to help customers make better financial decisions, said that while tracker mortgages currently offer much lower rates than fixed-rate deals, many borrowers are worried about the effect any inevitable increase in the base rate will have on their ability to repay the loan in future.

"It appears that those looking for a new deal are subsidising the revenue lenders are losing from existing customers on low-rate standard variable rate (SVR) or tracker deals, some of which are currently paying less than one per cent," stated Ms Slade.

Her comments follow the release of a report by Unbiased.co.uk, which revealed that 27 per cent of homeowners are now on an SVR compared to 23 per cent earlier in the year.

Meanwhile, the Council of Mortgage Lenders recently reported that there are further signs of stabilisation in the mortgage market.

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