Despite cost, fixed-rate mortgage security desired

Fri, 20 Jun 2008

Despite the higher cost of fixed-rate mortgages, more and more borrowers are seeking this kind of product in a quest for security and protection from changes in interest rates . The majority of consumers are looking for fixed-rate mortgages, a survey form Legal and General indicated.

The cost of fixed-rate mortgages has climbed to above 6.34 per cent on average in today’s market. The director of housing at Legal and General, Stephen Smith, was reported as commenting:

"There has been a huge jump in the number of homeowners opting for fixed-rate mortgages despite the significant increase in rates, particularly for two and three-year deals."

The desire for fixed-rate loans persists despite recent indications from Moneyfacts.co.uk that fixed rates are their highest in a decade. Ten and five-year fixed-rate mortgage loans are also becoming more common due to Government support and the desire for long-term fixity of monthly repayments .
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