Mortgages -
Britons want fixed rate mortgages - 21/02/2008
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Consumers are choosing fixed-rate mortgages over other mortgages as they prefer the security of stable and protected monthly repayments, it has been suggested.
Britons prefer to be protected from any rises in the Bank of England's (BoE's) base rate and be able to budget toward fixed, monthly repayments, commented James Caldwell, director at Fairinvestment.co.uk.
His comments follow a survey published by the company which revealed that 57 per cent of Britons would choose a fixed-rate mortgage when looking to renew their policy, with 30 per cent preferring a short-term deal compared to 27 per cent who would opt for a long-term policy.
Tracker mortgages were preferred by less than a quarter (23 per cent) of homeowners sampled in the study.
Rising numbers of repossessions, the Northern Rock saga and the BoE's continued battle against inflation amid economic uncertainty on the markets have taken their toll on consumers, the firm stated.
"Despite two base rate cuts in the last two months, people are looking for certainty in their personal finances," Mr Caldwell noted.
But he added: "While it is understandable that homeowners want to protect themselves from economic uncertainty, opting for a fixed rate mortgage means that they do not benefit from any further drops in interest rates."
This month the BoE's monetary policy committee voted to cut UK interest rates from 5.75 per cent to 5.5 per cent after announcing a rate reduction of 25 basis points in December.
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