Nine out of 10 opt for fixed rates

Nine out 10 borrowers are opting to fix their mortgages despite little sign of forthcoming base rate hike.

Historically low mortgage interest rates and jitters about the economy are persuading growing numbers to lock in their borrowing, according to the National Mortgage Index from brokers Mortgage Advice Bureau.

More than 1.85 million borrowers have taken out their first mortgage since 2009 which means they have never experienced a Bank of England rate rise.

Many are seeking to avoid a financial shock should bank base rate increase, which would impact their future mortgage payments.

Mortgage Advice Bureau’s head of lending Brian Murphy said: “Lenders are keen to introduce new products to meet consumer needs and grab market share where possible.

“This increasing appetite from lenders in the form of wider choice and ever more competitive products has fuelled borrowers’ appetites, which is borne out by the increased levels of activity we’re seeing.”

With competition forcing fixed rates to historic lows, 93.9% of home purchasers and 88.8% of remortgagors who arranged a mortgage through the Mortgage Advice Bureau in April chose to fix.

Murphy said: “With the EU referendum in less than a month, a lot of consumers are looking to secure their household expenditure.”