Fixed Rate Mortgages More Popular Than Ever
Below is a MRR and PLR article in category Finance -> subcategory Wealth Building.
Fixed Rate Mortgages Surge in Popularity
Summary
According to the Council of Mortgage Lenders, 71% of all mortgages and remortgages in April 2006 were on fixed rate terms, up 17% from the previous year. The appeal of fixed rate deals stems from attractive lender offers and consumers' desire to secure low rates for extended periods.Article
Fixed rate mortgages have reached unprecedented popularity. Recent data from the Council of Mortgage Lenders shows that in April 2006, 71% of all mortgages and remortgages were fixed rate, a 17% increase compared to the same month last year. This surge is credited to enticing lender offers and consumers' eagerness to lock in current low rates.
The trend shifted slightly toward new mortgages over remortgages, possibly indicating that lenders are making remortgaging less appealing for existing borrowers. High exit fees play a role in this shift, with regulatory bodies now looking into these increases.
For first-time buyers, the average mortgage size grew to £106,400, nearly £12,000 higher than April of the previous year. These buyers are borrowing 3.21 times their earnings on average, a slight increase from last month. Currently, mortgage payments account for 16.2% of the average borrower's income, which has decreased slightly?"potentially due to the rise in fixed rate deals.
Some lenders now offer fixed rate deals lasting up to 15 years, a sign of confidence in the stability of future money markets. This development is promising for many.
However, the situation raises concerns. People are borrowing more, committing to longer terms, and dedicating a higher portion of their income to mortgage repayments. These trends are driven by the rapid increase in house prices and the fear that delaying a home purchase could mean missing out entirely on the housing market.
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