Five-year fixed-rate mortgage deals growing in popularity

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by Kay Murchie

Research from Abbey Mortgages said demand for five-year fixed-rate mortgage deals is set to grow.

Abbey surveyed almost 1,000 borrowers, 24% said they would opt for a five-year fixed deal if they were to re-mortgage tomorrow. This is up from just 12% in March.

The study follows news of a shrinking mortgage market with significantly fewer mortgages now available. Since the start of the credit squeeze, over 70% of mortgage deals have disappeared.

Nici Audhlam-Gardiner, director of Abbey Mortgages said recent reports about the shrinking mortgage market seem to have had a profound effect on borrowers.

The research indicates that borrowers are increasingly looking for certainty over a longer period of time. Two-year fixed deals now trailing well behind the five-year deals in the popularity stakes.

However, two-year fixed rate deals remain the second most popular choice among borrowers, with 10% of borrowers suggesting they would choose such a product when re-mortgaging. 8% of borrowers would opt for a three-year fixed-rate mortgage.