The preference for longer-term mortgage products has overtaken two-year deals for the first time in five years, with 48% of mortgage customers choosing a term of five years or more during Q4 2017, compared to 41% in Q3 2017, according to Paragon’s FACT (Financial Adviser Confidence Tracking) index report.
In Q3 2016, longer-term mortgage products accounted for just 33% of the market. The firm's latest figures illustrate a tremendous growth in popularity of the longer-term product.
During Q4 2017, two-year term mortgage products made up 40% of the tracked market, a decline of 7% compared to Q3 2017. At their peak in Q3 2013 and Q3 2014, two-year term mortgages accounted for 54% of mortgage applications.
A preference for fixed-rate mortgages also hit another all-time high in Q4 2017, representing 91% of all cases monitored by Paragon, an increase of 2% over Q3.
Whilst fixed-rate mortgages are on the rise, tracker mortgage products continue to decline in popularity, dropping to 7% in Q4, a further decrease of 2% over Q3.
Paragon managing director of mortgages John Heron commented: “The results of our latest intermediary research highlight the overwhelming preference that the market has for fixed rate products and increasingly for longer term fixed rate products. Much of this is driven by the understandable requirement that landlords have for payment stability into the future against an uncertain economic backdrop.”
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