Fixed Rate Mortgage Applications Continues To Rise
According to recent statistics, the number of consumers in the UK that are taking out fixed rate mortgages over variable rate ones has risen, and this suggests to many homebuyers are concerned that the interest rate set by the Bank of England is set to rise again.
A recent rise in the interest rate took the rate up to five percent, making things even more difficult for homebuyers, particularly first time buyers, is a market where affordability is already a huge problem due to the value of properties.
According to officials from Mortgages Direct there was a six percent jump in the number of borrowers taking out fixed rate mortgages in November compared to October, and the fixed rate mortgage made up ninety seven percent of the market in November. More borrowers are also opting for bad credit mortgages, also known as sub prime mortgages, with a thirteen percent rise in November from October.
With regards to the increase in those taking fixed rate mortgages the director of Mortgages Direct stated: “Homeowners were anxious to secure a fixed rate mortgage for a longer period of five years in November as interest rates increased for a second time this year and borrowers became alarmed about further imminent rate rises.”
The interest rate hikes from this year have already left many of those with variable rate mortgage struggling to meet the higher repayments.
According to the data, the percentage of mortgages taken out by first time buyers in November was low and stood at less than a third, reflecting the difficulties that first time buyers are having when it comes to getting onto the property ladder.
The director from Mortgages Direct added: “First-time buyers are often the most sensitive to a rise in interest rates and are still finding it increasingly difficult to get on to the property ladder. This low level of first-time buyers is worrying as housing activity is dependent on the influence of first-time buyers.”
10th December 2006
- What Is A Mortgage?
With the price of property ever increasing and no sign of the long awaited bursting bubble of the housing market, we ask what can young first time buyers do to gain their freedom and set up a home of their own in such an expensive arena and what is a mortgage anyway?
- Choosing The Right Mortgage
The market is flooded with different types of mortgages, but how do you know which one is right for you? The decision has to be yours, whether you take advice from an Independent Financial Advisor or do your own research.
- Different Types Of Mortgage
Rather like a full house in poker there seems to be a wide selection of mortgages on the market, but aren’t many of them the same kind of product?