House buyers 'opt for fixed rate loans'

By Jonathan Dawes, Thu 28 Aug 2008 - Published in Mortgages

Research by Nationwide has found the number of borrowers opting for fixed rate loans went up in August.

Commenting on the figures, Fionnuala Earley, Nationwide's chief economist, said although less people are taking out mortgages at the moment, with the current economic uncertainty, those people who are borrowing are more inclined to opt for a fixed rate loan.

She stated despite the fact that tracker loans have been cheaper than fixed rate loans since October last year, 44 per cent of borrowers claim they would prefer to go for the fixed rate option.

This is unusual among UK mortgage holders who have been shown to attach enormous weight to the level of initial, monthly repayments, rather than potential movements in price over the long term, she said.

Me Earley commented: "This change in behaviour could be an indication that borrowers are keen to be sure of their outgoings in uncertain times."

In other news, iammoving.com claims speculation that the government may scrap stamp duty has caused anxiety in the housing market.

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