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Homeowners 'opt for fixed-rate mortgage deals during economic uncertainty'

By Jonathan Dawes, Thu 12 Jun 2008 - Published in Mortgages

The proportion of fixed-rate loan agreements increased during April suggesting that borrowers are looking for security over future mortgage repayments, according to figures from the Council of Mortgage Lenders (CML).

The percentage of borrowers opting for a fixed-rate deal rose from 54 per cent in March to 59 per cent in April, the organisation reports.

First-time buyers typically put down a deposit of 13 per cent in April, the highest figure in over three years.

People getting their first step on the housing ladder were also revealed to have taken out loans which on average were 3.3 times their income, down from 3.35 in March.

The CML states these are clear signs of mortgage lenders tightening criteria.

Micheal Coogan from the organisation said: "While tighter criteria make it more difficult for some borrowers to obtain a mortgage, they also reduce risk in a slower housing market."

Meanwhile, Bestinvest has predicted that housing market conditions will start to improve for first-time buyers.