15 Jan

Majority of mortgages are fixed rate, study shows

Majority of mortgages are fixed rate, study shows

The majority of UK mortgages are fixed-rate deals, new research has revealed.

A study by finance portal Fairinvestment.co.uk has found that 52 per cent of current British mortgage holders are on a fixed rate, despite the recent reductions in the Bank of England base rate to a record low level.

The report revealed that 29 per cent were on standard variable rate mortgages - which some lenders have cut - while the least common type of mortgages are trackers at 16 per cent.

Tracker customers will have automatically gained from recent monetary policy committee decisions, unless their deals include collar rates that limit how low they can fall, the portal noted.

Chartered financial planner at the website Sharon Bratley said those on fixed rates now may be worse off than before as their mortgages are getting no cheaper while their savings earn less interest.

However, the situation could be different for new borrowers as "lenders are also beginning to reduce the rates on new fixed-rate mortgage rates", she added.

In related news, the Co-operative Bank said today it will not lower its standard variable rate in response to the latest base rate change, but stated that customers could switch to other deals.

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