The popularity of fixed rate mortgages is approaching record levels with 96% of homebuyers opting for a fix in September, according to new research from the Mortgage Advice Bureau.
The data from the latest National Mortgage Index suggests borrowers are increasingly looking to take out fixed rates while mortgage pricing remains low.
The average two-year fixed rate rose from 2.68% in August to 2.72% in September, the first rise after 12 months of consecutive record lows.
Five-year fixed rates also rose for the first time since August 2014, while two year trackers rose for the second successive month.
The index also revealed that the total number of mortgage products on the market reached another new high in September with 16,465 products recorded, a 4% rise from August.
Brian Murphy, head of lending at the Mortgage Advice Bureau, said: “Sooner or later, the predictions of an interest rate rise are going to become a reality and some lenders have started to act ahead of this to ensure they are not short changed. Borrowers should not be too alarmed by September’s jump in pricing, as there was only a slight increase and three year fixed rates continued to fall. All the same, it is a timely wake-up call that these rates are not here to stay forever.
“Opting for a fixed rate could be a wise step to safeguard your repayments for the future, and the longer you fix for, the longer you are protected. Affordability checks are there to ensure there is plenty of room left in people’s budgets to account for higher repayments in future, but anyone in a position to buy or remortgage should consider making the most of the competitive pricing and thousands of products currently available.”
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