Borrowers prefer fixed-rate mortgages

Published: February 21, 2008

The majority of borrowers would rather be on a fixed-rate mortgage, according to new research.

A total of 57 per cent of those questioned by the Fair Investment Company (FIC) revealed that they would prefer the security of a fixed-rate.

Of all of those questioned, 30 per cent said that a short-term fixed-rate would be their ideal mortgage, while 27 per cent would opt for a long-term deal.

James Caldwell from the FIC said that many people enjoy the security provided by fixed-rate mortgages.

"A fixed-rate deal allows homeowners the security of knowing what their monthly repayments will be and therefore to budget accordingly, safe in the knowledge that they are protected from any rises in the Bank of England base rate," he commented.

"The public are obviously wary of exposing themselves to the economy at large and are acting accordingly, with a high proportion of people opting for fixed-rate mortgage deals.

"Despite two base rate cuts in the last two months, people are looking for certainty in their personal finances," continued Mr Caldwell.

It was recently revealed by Abbey that many mortgage borrowers are confused about which type of mortgage deal to choose.