Mortgage News
"Variable Rate Mortgages Most Popular in July"
August 2006 - Wednesday 09th August
The news comes as little surprise following the Bank of England Monetary Policy Committee’s decision to increase interest rates to 4.75 per cent. In the lead up to the decision, market commentators were undecided about whether the BOE would increase the base rate . This indecision obviously affected the type of mortgage loan consumers chose.
During June 30 per cent of borrowers chose variable rates as opposed to 26 per cent during May. The number of variable rate mortgages applications was four times higher than the same time last year.
Tracker mortgages were the deals of the year prior to the base rate hike, due to interest rates remaining stable for a whole year. Fixed rate mortgages had been increasing in price in anticipation of the rise.
An expert from Mortgages Direct reported: "With record numbers of borrowers opting for variable mortgages, many homeowners will obviously be very concerned about the latest base rate rise. However, variable mortgages are still competitive compared to fixed rate deals. Although, any further rise in interest rates will certainly pose a serious problem for many homeowners . Many borrowers went for variable mortgages, prior to the Bank of England's decision last week, with the understanding that rates will only increase by 0.25% for the foreseeable future. It will be interesting to see how popular variable mortgages remain, now that the rates have increased and may increase still further."
Source: Mortgages.co.uk
New figures released show that a high level of borrowers take variable rate mortgages in July.
© 2007 Michael J Alexander
Your home may be repossessed if you do not keep up repayments on your mortgage. Written quotations compliant with the Mortgage Conduct of Business (MCOB).
Variable Rate Mortgages Most Popular In July
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