The latest research from First Active has confirmed that the demand for flexible and current account mortgages is growing.
According to the First Active Flexible Mortgage Index, 43% of borrowers with traditional products are thinking about remortgaging to a more flexible product, while 30% of those with a flexible product are considering moving to a current account mortgage.
Natasha Plackett, public relations manager at First Active, said: “With the proliferation of flexible products on the market and with consumers becoming more aware, many borrowers using flexible mortgages are considering taking the next step and remortgaging onto a current account mortgage as they offer even more flexibility.”
The index is now predicting that within five years, flexible mortgages will account for 55% of all lending.
Borrowers are also making the most of the product’s flexibility, according to First Active. Over a third are making overpayments and nearly three- quarters are intent on repaying their loan early.
Of those borrowers who had made overpayments, 70% made regular overpayments while a quarter made lump sum payments. The reasons for overpaying were usually a desire to repay the loan as soon as possible, but the need to make interest savings was also a significant factor.
The research also indicated that more and borrowers are looking to repay their loan over 25 years. “Traditional mortgages have usually been paid over a 25-year term, but just 2% wanted to spread their mortgage over this long a period,” said Plackett.
She added: “This shows that people want to get rid of their mortgage and are doing so with overpayments.”