Fixed rate mortgages accounted for 71% of all house purchase loans and remortgages in April, research out from the Council of Mortgage Lenders has revealed.
This figure is 2% higher than in March, and 17% more than in April 2005. It says the increasing popularity of fixed rate products reflects attractive deals being offered by lenders, coupled with consumers wanting to lock into low-rate long-term deals.
The CML’s survey also found that loans for house purchase accounted for 46% of all loans in April – up from 43% in March, but slightly lower than the 45% achieved in the same month last year.
Remortgaging accounted for 36% of all loans, and this is slightly lower than in March, but down by 5% on April 2005.
Loans to first-time buyers totalled 30,700 in April and the survey reveals that the average first-time buyer loan size is now 106,400, up from 103,839 in March and significantly higher than the 94,995 in April last year.
In April, first-time buyers borrowed 3.21 times their income to get a mortgage, up from 3.15 times in the previous month. However, mortgage interest payments as a proportion of income have actually fallen to 16.2%, from a peak of 17% in June 2005.
Michael Coogan, director general of the CML, says: “Today’s data confirms that the market is in good shape. The strong take-up of fixed rate deals is encouraging because they give consumers confidence in their mortgage payments and allow them to plan ahead financially.
“It is also interesting to see that while both first-time buyers and movers are borrowing a greater multiple of their income to get a mortgage, their payments as a proportion of income are lower than in the same period last year. This is potentially due to the higher take-up of attractive fixed-rate products over the past year.”