Homebuyers looking for long term commitment

Published: 15/05/2013

There has been an increase in the number of homebuyers and owners taking out a long term fixed rate mortgage, according to global business intelligence provider RFi.

Whilst previously happy to ‘flirt’ with standard variable rates or shorter fixed rate loans, economic uncertainties both at home and abroad has led to more borrowers leaning towards deals of more than three years.

In February 2013, a quarter of borrowers – either for conveyancing or remortgage purposes - took the plunge and opted for a longer term fixed rate mortgage, an increase of 7 per cent year-on-year.

Whilst the Bank of England base rate remains at its historic low rate of 0.5 per cent, there is an expectation within the industry that this could soon start to increase. As a result existing homeowners, movers and even first time buyers are looking to lock in a competitive rate for a longer period of time.

Lynne McCaffrey is the Head of Property at Goldsmith Williams:

“It is easy to understand why more homeowners are choosing a longer term fixed rate mortgage - with so much financial uncertainty, buyers and remortgagers are looking to take control of their own outgoings.

“As a result we are starting to see a wider choice in the number of five and even ten year fixed rate deals coming on to the market.

“For anyone looking for a mortgage, whether to buy a property or to remortgage a current one, a financial adviser has the knowledge and expertise to assist in the decision making process including offering professional advice on longer term fixed rates.”

Content correct at time of publication