Ever-increasing fears over the economy, as a result of Brexit uncertainty, has had a major impact on the type of mortgage deals homeowners are opting for. With more borrowers than ever choosing to spend more in interest payments in return for longer term security, as the 31st of October deadline creeps closer.
Record numbers for fix rate mortgages
A report from finance experts Moneyfacts has highlighted how the number of 10-year fixed rate mortgages has hit a record high of 157. These types of mortgages allow homeowners to know exactly what their mortgage payments will be over the 10-year term.
It seems that Brexit has led to a surge in demand for these types of mortgages, with many being tempted to lock themselves into a decade-long fixed rate, as the number of tracker rate mortgages falls.
The report reveals that there are currently 242 tracker rate mortgages available in the market. When compared to all residential mortgages that are currently available, this adds up to just 5% of them.
A positive effect on rates
It seems as though the rise in longer-term fixed rates on offer and the increased choice in the mortgage market has had a positive impact on rates. The average rate charged on a 10-year fixed mortgage is currently 3.01%. This is a fall of 0.09% year-on-year from the 3.10% recorded in August of last year.
Data from the Bank of England has also highlighted that 92% of all new mortgages taken in the first few months of 2019 were fixed rate mortgages. Further reflecting the declining interest in variable rates from borrowers.
The majority of borrowers are still opting for shorter to medium-term fixed rate deals, which last from 2 to 5 years. However, as the report from Moneyfacts shows, the number of people locking to longer term deals is definitely on the rise. Despite expectations that a no-deal Brexit would lead to the Bank of England cutting interest rates.
It’s important to remember that a decade-long fixed rate mortgage is always a big commitment. So, it’s important to really consider your options and that you feel confident that your circumstances are unlikely to change. This way you can avoid the added expense of having to refinance earlier than expected.
Choosing whether you lock yourself into a short or long term mortgage deal is a personal decision as well as a financial one, and at TaylorMade we have access to the entire mortgage market, to help you find the most suitable mortgage product for your situation.
Whether you’re a first time buyer, a self employed small business owner or a buy-to-let investor, our experts can help you get a great deal - get in touch with us today on 0345 305 2540 or at info@taylormade-finance.co.uk
