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Over 80% of borrowers opt for fixed-rate mortgages

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  • 19/09/2012
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Over 80% of borrowers opt for fixed-rate mortgages
Over 80% of borrowers are taking out a fixed rate mortgage product, the highest level in over three years, according to Mortgage Advice Bureau (MAB).

The firm’s National Mortgage Index found the rate of borrowers choosing fixed-rate products had risen by 3.8% to 83.1% during August, the biggest percentage since June 2009.

For remortgage customers the number of borrowers picking fixed-rates was at 84.2%, 15.8% higher than at the start of the year.

The survey said that this increase in fixed-rate sales was down to a fall in prices across the month. Both two and five-year fixers were down compared to July levels, with the average five-year deal falling 0.14% to 4.73% in August.

Across the market there was a dip in total applications during the month, 4.16% down on July figures, but the number of applications was 14% up on the start of 2012.

Brian Murphy, head of lending at Mortgage Advice Bureau, said: “We saw a growing number of lenders releasing more competitive products as a result of the Funding for Lending Scheme.

“In particular, we’ve seen a marked increase in the number of fixed rates, demonstrating that borrowers are seeing real value in both the price and security they offer.

“In August, we saw an increase in competition among lenders both in terms of pricing and also in numbers, with the number of products available on the rise.

“As such we expect this will start having more of an impact on activity this month and that September will be a strong month in terms of new applications.”

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