Mortgageforce's Technical Manager Katie Tucker comments: "Two year fixes were always the favourite, or trackers when Bank Rate is widely expected to fall, but this rush to commit long term shows that consumer attitude has turned a corner. Borrowers who have been weighing up the chances of lenders realistically cutting rates any further, versus the chance of Bank Rate being increased in the next few years, the equity left in their properties, and even their job security, are choosing to commit now.
"Neither is it that the longer term deals are priced cheaper than two year fixes: it seems borrowers are choosing to pay marginally more for a recession buffer that will tide them over for as long as possible. Even many borrowers benefitting from their lenders' very low standard variable rates are choosing to switch to a fixed rate now that will keep their payments low and give better value if the variable alternatives start to increase."
The most popular lenders are Abbey; who has a three year fixed 4.14% with the £995 fee, free valuation and legals on remortgages and the facility to overpay up to10% penalty free each year, available up to 70%; and Alliance and Leicester who have a 5 year deal at 4.79% with a £995 fee and refund of valuation, available up to 75%. Halifax and Bank of Scotland Borrowers should also note that a Whole of Market broker can search the whole market place for your best choice now but also carry out the internal transfer within Halifax or Bank of Scotland if their own ‘product transfer' deals work out better for you.
Tucker concludes: "We have also seen more ten year fixed rates being taken this month than ever before, as prices are so historically competitive. The initial consultation with most brokers is free so I strongly recommend borrowers at least get a quote of what they could sign up for now."
