A record number of first-time buyers are opting for fixed-rate mortgages, according to data from the Council of Mortgage Lenders.
Figures for February reveal 87% of first-time buyers (FTBs) chose a fixed-rate loan – up from the previous record of 84% in January and 82% in February last year.
In addition, 70% of home movers took out a fixed-rate deal, compared to 67% the previous month.
Overall, fixed-rate loans accounted for 76% of all loans for house purchase, returning to their highest-ever level last achieved in November 2005.
The CML says fixed-rate deals remain attractively priced compared with other products – since August 2006 they have increased in price by 0.16%, while discounted, tracker and standard variable-rate products have increased by more than 0.5%.
Michael Coogan, director general of the CML, says: "With the chance of at least one more interest rate rise this year, first-time buyers are taking the sensible option of taking out fixed-rate deals, and locking into the payment security they provide.
“First-time buyers are the most financially stretched group, and the fact that a record number of them are choosing a fixed-rate deal demonstrates their desire to plan ahead and avoid the risks interest rate rises would bring."
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7034 2680 or email [email protected].IFAonline
Slower revenue and profits
Two questions to consider
IHT mitigation services
What made financial headlines over the weekend?