Fixed rate mortgages have now returned to levels of popularity last seen in 1998, since which time low interest rates in the market and the expectation of continued low rates in the future had encouraged people to opt for variable rate deals. Paragon Mortgages’ managing director John Heron said: “Maybe the nation is heeding the Chancellor’s words, or maybe they just find today’s fixed rate deals irresistible, but there’s a clear shift this quarter in favour of fixed rate, as almost 4 out of 10 borrowers opt for the added certainty of fixed rate – the highest figure for 5 years.”
Paragon’s Financial Adviser Confidence Tracking (FACT) Index survey for the second quarter also shows the proportion of new mortgages accounted for by first time buyers falling yet again to 11% - the lowest ever level in the Paragon Mortgages survey. First time buyers accounted for 19% two years ago. At the same time, the number of cases of remortgages continued to grow, to 55% this quarter, up from 52% last quarter. Buy-to-let mortgages grew steadily from 8% to 9%, reflecting the high levels of activity from investor landlords, driven by strong tenant demand for rented accommodation.
