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Fixed-rate mortgage uptake falters

Friday 26th June 2009

The recent upward trend in the uptake of fixed-rate mortgages has faltered this week, it has been claimed.

According to Mortgageforce, low tracker rates are responsible for the drop in the number of borrowers signing up for fixed-rate mortgage deals.

The independent mortgage provider claimed that recent increase in cost of fixed-rate deals averages out at 0.6 per cent, while the average increase in cost of many tracker deals amounts to 0.3 per cent.

This has caused many borrowers to revert to tracker products, and the company claims that the number of borrowers taking on fixed-rate products has fallen from 75 per cent to just 64 per cent in the past week.

Katie Tucker, Technical Manager for Mortgageforce said: "Next week will be as confusing for borrowers; whilst a borrower's choice between a fixed-rate and a tracker is largely based on how they expect Bank rate to behave in the next few years, when the price difference between the two is this significant, it's difficult to resist the cheaper one."

With the housing market still in turmoil it is hard to say which option would be preferable.

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