25
Mar
Fixed-rate deals 'dominating new business'
Nearly three-quarters of new residential mortgages in the first
three months of 2009 were fixed-rate deals, new research has
revealed.
The study by Legal & General has found that during the first
quarter of this year, 72 per cent of mortgages for owner occupiers
have been fixed-rate products, compared with 65 per cent in the
fourth quarter of 2008.
Over the same period the proportion of such mortgages being taken
out for buy-to-let purposes rose from 43 per cent to 68 per
cent.
The firm noted that the average two-year fixed rate has dropped to
4.78 per cent from 5.9 per cent in the third quarter of 2008, with
the three-year average dipping from 6.3 per cent to 5.41 per
cent.
Commenting on the findings, director of housing at Legal &
General Stephen Smith stated: "Fixed rates are very much back in
favour, partly because lenders have been increasing the margins on
their new tracker mortgages."
The best two-year deals for fixed-rate mortgages are now half as
expensive as they were last summer, Mail Money expert Liz Philips
stated in the Daily Mail.
A reduction from an average of six per cent to three per cent would
mean a £150,000 mortgage costing £280 less a month, she
said.
