Consumers looking for mortgages over longer terms
According to official from a mortgage broker group more and more people in the UK are now looking to take mortgage loans out over longer terms. The officials claim that over half of the people that came to get help in finding a mortgage product were looking for terms of at least three years.
The group added that many of these consumers were keen to take advantage of the fact that the base interest rate is still at its lowest level ever, and in order to secure a good deal were willing to tie themselves in for longer.
The report also claimed that two year fixed rate products and tracker mortgages have become increasingly unpopular in the current economic climate, partly as a result of the ongoing recession.
One official from the group stated: “Two year fixes were always the favourite, or trackers when Bank Rate is widely expected to fall, but this rush to commit long term shows that consumer attitude has turned a corner.”
The group said that it was likely that most consumers thought that over the next year or two the base interest rate will start to go up again, and the current low rate deals that are currently on offer from many lenders will disappear from the shelves. Many are therefore keen to get themselves on to these competitive rates as soon as possible, even if it means tying themselves in for a longer period.
Whilst longer term products are more costly than the shorter term ones, this doesn’t seem to be putting consumers off, according to group officials.
The group official went on to state: “It seems borrowers are willing to pay marginally more for a recession buffer that will tide them over for as long as possible.”
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