New research by Yorkshire Building Society suggests more borrowers are choosing to fix their mortgage for five years.
Since 2011, the proportion of mortgage deals lent by the Society at a fixed rate for five years has risen by 24%, as borrowers seek out longer-term security to help them better plan their monthly budgets. The proportion of two-year fixed rate mortgages has fallen slightly.
Over the same period, tracker mortgages have fallen in popularity by half and borrowers now are choosing a five year fixed rate mortgage over a tracker mortgage by a rate of almost six to one compared to two years ago.
Brendan Gilligan, Yorkshire Building Society’s product manager, said: “We’ve seen a rise in the popularity of longer-term fixed rate mortgages with borrowers for some time now and this shift has escalated during 2013.
“While the Base Rate has remained at its historic low many borrowers want to lock in to as competitive a deal as possible to protect themselves against potential rate rises in the future.
“Borrowers are less likely to choose a tracker as potential short term savings are outweighed by the security of fixing their biggest monthly outgoing when other costs such as food and utility bills keep going up.”
