Poll results: 56% would prefer a 5 year fixed rate

Published ¤ 12/08/2011 15:13:59

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Mortgage Solutions, a mortgage industry publication, recently held a poll, asking, now that 5 year fixed rate mortgages have dropped below 3.5%, if people would prefer to fix their mortgage for 5 years. 56% of respondents said "Yes", they would prefer to fix for 5 years.

5 year fixed rates now more popular
With recent turmoil in the financial markets, the price of gilts, which are used to determine fixed rate pricing, have dropped to an all-time low. As such, we are now seeing 5 year fixed rates well below the 4% mark, and some even below 3.5%. This is tempting more people to fix their mortgages for longer terms.
However, not everyone agrees that fixed rates have hit the bottom yet, with 15% of respondents believing that rates have further to drop.
Waiting could be a dangerous game though. Only 8 or 9 months ago, people believed fixed rates would drop further, only for them to suddenly begin to rise, as the threat of higher interest rates loomed. Fortunately for those that waited, rates have dropped since then as the threat passed, but it could so easily have been a different situation.
With so many home owners enjoying low variable rate on their mortgage, fixing now, when fixed rates are at record lows, could be a sound investment.
It is still important to seek independent mortgage advice though, as many of the very low fixed rates come with substantial fees, and a broker can calculate the "true" cost of the mortgage, taking all the costs into account, and advise on the best 5 year fixed rate available.
Also, as many lenders have tightened their criteria, it is important to understand which lenders will be most sympathetic to your exact requirements. Be aware, that if one or two lenders turn you down, this could seriously affect your chances of getting a mortgage elsewhere. A good mortgage adviser will be able to tell you which lenders will consider your application.
If you are looking to switch your mortgage, then please call PKS on 0845 226 5009, to discuss your requirements, or click here to send a message.

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