|    FM Home   |    FM News   |    FM Forum   |    FM Blog   |   
Wednesday 29th of October 2008
April 10, 2008

Borrowers opt for five-year fixes


by Gill Montia
”Borrowers

Abbey, the Spanish-owned bank, has reported a sharp rise in application for five-year fixed-rate mortgages.

According to the bank’s research, demand has doubled in the past month, with 24% of borrowers opting for security in the current uncertain economic climate.

A month earlier, only 10% of homebuyers opted for a five-year fix.

Two-year fixed rate deals have also increased in popularity, with Abbey recording a three per cent rise in the past month, taking applications for this type of loan to 10%.

The bank’s director of mortgages, Nici Audhlam-Gardiner, sees the change as directly related to the dramatic reduction in the number of mortgages available.

Only last week, HSBC subsidiary First Direct closed its doors to new business and mortgage products (particularly the most competitive) continue to be withdrawn on a daily basis.

Meanwhile, tracker mortgages are becoming less popular, with applications falling by more than half between March and April.

The decline clearly indicates a lack of confidence as predictions of base rate cuts during 2008 have remained constant.

The research also reveales that six per cent of people buying a home would choose to fix their rates for 25 years if they could.

The market for the 25-year fixed-rate mortgage is small in the UK, although not in Europe generally.

The Government is known to be keen to promote this type of loan as a means of creating stability to the housing market.

Discuss this in the Finance Markets forums

Story link: Borrowers opt for five-year fixes


Add to Bookmarks:

ADD TO DEL.ICIO.US     ADD TO DIGG     ADD TO FURL

ADD TO STUMBLEUPON     ADD TO YAHOO MYWEB     ADD TO GOOGLE     ADD TO SPURL

 

 

Previous: « 200 jobs go at Royal Bank of Scotland
Next: Further sub-prime losses expected in British banks »

Visited 850 times, 3 so far today