The research from Saffron Building Society shows that borrowers would choose fixes over trackers because they feel rates will rise soon.
Only 11% say that they would take out a tracker mortgage as they believe a rate rise will not happen in the near future, while over half (53%) admit that they just don’t know what to do.
With the country’s finest economic experts often producing conflicting views as to when rates will finally move it is no surprise that Britons are confused about the mortgage market – and this confusion doesn’t end here.
Despite around 400,000 people being expected to remortgage in 2011, when asked to guess the application fees they would need to pay for a new mortgage, 45% of Britons said they would have no idea, while of those 44% who did estimate a cost, the average amount was £532. According to the latest data by data provider Moneyfacts the average application fee is actually £957 – with some fees rising to up to £2000 in total.
Worryingly, in order to meet the costs of taking out a new mortgage 8% would use credit, or borrow from family members. Twenty eight percent would add the costs to their new mortgage.
Andy Golding, chief executive of Saffron Building Society, said: “Borrowers clearly expect that a rate rise is on the cards sooner rather than later, so now is the time when many could be looking to remortgage. However, these people could be in for a shock when it comes to meeting their mortgage application fees. Those we surveyed estimated these to be around £500 but on average fees are almost double that, which is why at Saffron we are giving borrowers a real financial boost by offering a fee free remortgaging service.”
