11 Aug

Homebuyers opt for fixed-rate loans

Homebuyers opt for fixed-rate loans

The popularity for fixed-rate loans among homebuyers looking for houses for sale in the UK has grown.

This is according to recent figures released by the Council of Mortgage Lenders (CML) for June.

Findings revealed that 28 per cent of new borrowers opted for a fixed-rate loan, representing the highest proportion of people taking out this type of mortgage during the first six months of 2010.

While fixed-rate loans were thought to be an unpopular choice for homebuyers throughout the year as a result of a low bank rate of 0.5 per cent, figures suggest that people are beginning to opt for a more secure mortgage in case the rate rises.

Yesterday (August 10th), Yorkshire Building Society's Tom Girling stated that fixing mortgages can give homebuyers "peace of mind" over future repayments.

June also saw an increase in the total number of people looking to borrow money to buy a new home, which will come as a good sign for homeowners keen to sell.

CML economist Paul Samter said: "The effects of government spending cuts have yet to make an impact on mortgage demand and activity continues on its upward trajectory."

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