Borrowers are opting for five-year fixed-rate mortgages over two-year products for the first time, new figures have revealed.
Nearly half (48%) of mortgages written during the last three months of 2017 were for five years or more.
Meanwhile, only 40% were for two-year products despite them being the preferred option for the last five years, said Paragon’s latest Financial Adviser Confidence Tracking (FACT) Index report.
Indeed, Paragon reports a surge in take up of fixed rate products overall, with the numbers being written hitting another all-time high – the third in a year.
This was in stark contrast to tracker mortgages. Take up of these variable products was at an all-time low at the end of 2017, said the report which was based on interviews with 198 mortgage intermediaries.
The rise in popularity of the long-term fixed-rate mortgage has been attributed by many industry experts to the Bank of England’s 0.25% interest rate hike at the end of last year.
Many borrowers have sought refuge from future interest rate rises by signing up for longer term fixes.
John Heron, managing director of mortgages at Paragon, said: “The results of our latest intermediary research highlight the overwhelming preference the market has for fixed-rate products and increasingly for longer-term fixed-rate products.
“Much of this is driven by the understandable requirement that landlords have for payment stability into the future against an uncertain economic backdrop.”
