Fixed rates continue to increase in popularity, new Bank of England figures show.
The latest Bank of England report on mortgage lending shows between July and September 82.6 per cent of gross advances were on a fixed rate, the highest proportion since 2007.
The overall average interest rate on advances increased to 3.31 per cent. This was due to the average fixed interest rate climbing to 3.43 per cent, although it was partly offset by a fall in variable rate loan average rates to 2.79 per cent.
Brian Murphy, head of lending at Mortgage Advice Bureau, says the lending volumes show there’s “plenty of life left in the market” following the Mortgage Market Review.
“This is a positive sign for consumers, who are benefiting from improved access to mortgage finance despite tougher affordability checks.
“Lenders are currently tripping over themselves to win business, with many of the major providers locked into a mortgage rate war. This is providing consumers with historically low pricing: it’s therefore unsurprising that so many are choosing to lock into preferential deals, with [the] statistics showing the proportion of advances at fixed rates is at its highest since tracking began in 2007.
“This preference for fixed rate deals is likely to increase as consumers seek to protect themselves from an expected interest rate hike in 2015.”
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