Almost 90% of all mortgages cases now fixed rate products
Almost 90% of all mortgage cases are fixed rate products, according to Paragon Mortgages’ latest Financial Advisors Confidence Tracking Index report.
The report, based on interviews with 199 mortgage intermediaries, showed that the amount of five-year products reached an all-time high, at 39% of all mortgages written.
Two-year fixed products remain stable, making 47% of all mortgages in Q3 and are still the most popular product on the market.
Despite remortgages still being the most popular, figures have decreased from 39% in Q2 to 36% in Q3 with first time buyers and buy-to-let mortgages now taking a higher percentage of the market. Buy-to-let mortgages now make up 17% of all mortgage cases.
The distribution of mortgages based on type of repayment has remained consistent since 2008, with capital repayments continuing an upward trend and now representing 82% of the market. Interest only repayments make up the remaining 18% of mortgages, and are gradually becoming less popular, following a steady downward trend.
Paragon Mortgages managing director John Heron said: “With interest rates gradually increasing, after a long period of historic lows, it is not surprising that homeowners are racing to fix the cost of their mortgage for longer terms. Over the coming months, it is likely that we will see a further surge of borrowers locking into fixed rates before they climb higher.
“It is positive for the buy-to-let market to see application numbers increase after weaker numbers in the previous three quarters. Hopefully, this will be a sign of things to come for the buy-to-let market after a period of uncertainty following regulatory changes, reduced tax relief and the uncertainty around Brexit."
