Rate war sees homeowners flock to fixed-rate mortgages
A survey of over 2,000 homeowners by Nottingham Building Society found 65% will go for a fixed rate mortgage once their current deal expires, with half favouring a two or three-year deal and the other half considering a five-year plan or longer.
Bank of England data shows average two-year fixed rates have reduced substantially since 2014, saving the typical re-mortgage customer more than £1,000 a year.
However, the research shows confusion among remortgage customers as 16% don’t know what they’ll do when it comes to their next mortgage deal, while 6% said they will move on to their lender’s standard variable rate.
Ian Gibbons, senior mortgage broking manager at Nottingham Mortgage Services (part of The Nottingham), said: “The ongoing mortgage rate war among leading lenders has seen the launch of a range of low rates.
“The best deals do not tell the whole story of course as deals vary depending on how much equity homeowners have or how big a deposit they can find. But the trend in the past two years has been down and there are potentially substantial savings to be made.”
He said that customers need to be able to search the whole market and to look for as wide a range of deals as possible before making a decision on their next mortgage deal which means getting expert help.