Fixed-rate mortgages growing in popularity

Homebuyers are taking out more fixed-rate mortgages than ever before, according to research by the Mortgage Trust.

Fixed-rate mortgages now account for almost 60 per cent of the market, a rise of 12 per cent since the Bank of England’s Monetary Policy Committee started raising interest rates in August 2006, claimed the survey of financial advisers.

John Heron, the managing director for the Paragon group which Mortgage Trust is part of, told the Mortgages Solutions website: "Our research also shows that an even higher proportion of landlords have been taking out fixed-rate loans. 78 per cent of landlords have been opting for fixed-rate mortgages in recent months."

With interest rates rising a whole point since August and signs that they could continue to rise, landlords are keen to secure some form of stability so they know what their outgoings will be.

However, they are largely opting for short term fixed-rate mortgage deals, with two or three year contracts proving the most popular.