More homeowners are opting for longer-term variable rate mortgages because of uncertainty over the direction of interest rates in the future, according to Hamptons Mortgages.
Hamptons’ best buy mortgage tracker found long-term mortgage deals were becoming more popular generally, while the proportion of short-term mortgages is falling.
Data from the group shows a rise in the proportion of long-term - over three years - variable rate deals used of 13.11% between September and October, bringing the overall proportion to 23.78%.
Long-term fixed rates are also growing in popularity, increasing from 5.91% in September to 10.46% in October.
However, the market share of two-year fixed rates has fallen from 27.81% to 22.04%, while two-year variable deals dropped 11.89%, to 43.72%, over the same period.
Commenting on the findings, Jonathan Cornell, managing director of Hamptons Mortgages, says: “It would appear that borrowers are choosing to opt for longer term mortgages as they, like everyone else, are none the wiser as to what will happen with interest rates and are tired of second guessing.”
Hamptons says the proportion of loans taken for home purchase has fallen 10% between September and October and 26% over the past 12-months.
However, the firm also claims the buy-to-let purchase sector is doing well, with market share up 25.55% since September.
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