Fixed-rate mortgages remain most popular option

18-Sep-2008

A fixed-rate mortgage remains the most popular option for borrowers, whether they are first-time buyers (FTBs) or remortgaging, according to figures from Legal & General.

The research reveals that the number of borrowers taking out a fixed-rate mortgage fell during the third quarter of 2008, but still accounts for the majority of mortgages taken out,

Variable rate products saw an increase to 35 per cent, from 24 per cent in the previous three months.

Meanwhile, the average mortgage was 60 per cent loan-to-value (LTV).

Stephen Smith, director of housing at Legal & General, said: "As suspected, the popularity of fixed-rate mortgages peaked last quarter.

"Trackers will have attracted greater attention as forecasts of base rate cuts become more prominent."

He added that there are now fewer mortgages being offered with high LTVs, meaning FTBs need to find a bigger deposit.

Figures released by the Department for Communities and Local Government this week show that the average house price in the UK was £217,171 in July this year.

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