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Number of fixed rate deals rises for fourth month in a row

The number of people choosing fixed vates over variables has increased for the fourth month in a row, the latest Mortgage Advice Bureau/Coreco National Mortgage Index reveals.

It rose from 63.6% in October to 65.7% in November.

This compares with just 46.3% of applicants choosing fixed rate deals back in January 2010.

But the number of people choosing fixed rate mortgages is significantly below the 90% who chose fixed rate over variable rate products back in May 2009, at the end of the raft of interest rate cuts by the Bank of England.

The average LTVs on purchase mortgages dropped slightly from 70.4% in October to 70.1% in November.

Meanwhile, the average loan size for purchase mortgage applications increased from £123,982 in October to £126,162 in November, a rise of 1.8%.

The average deposit put down by a purchase mortgage applicant in November was £37,722 compared to £36,699 in October.

In terms of total mortgage applications, both purchases and remortgages, activity was up 23.4% for the year to date compared to the same period in 2009.

Remortgage activity fell by 6.5% in November compared to October.

The average LTV on remortgage applications rose only marginally from 55% in October to 55.1% in November.

The average remortgage loan size increased by a substantial 27.5% in November to £166,899 compared to £130,913 the previous month.

Brian Murphy, head of lending of Mortgage Advice Bureau, says: “Consumer confidence is relatively low due to still uncertain economic and employment conditions and therefore borrowers are increasingly opting for the security that fixed rates offer.

“The purchase market recorded a slightly surprising but welcome small increase in activity during November over October.

“Having witnessed a fall in October from September followed by last month’s increase this reflects the slightly disjointed nature of the current market as generally at this time of year purchase market transactional numbers would be falling month on month.”

 

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