CML: Fixed rates popular in April

A regulated survey from the Council of Mortgage Lenders (CML) has reported that fixed-rate mortgages were popular in April, accounting for 71 per cent of all loans for house purchase or remortgaging.

This is a two per cent increase in popularity compared to March 2006 and a 17 per cent rise compared to the previous year.

According to the CML, a combination of attractive deals from lenders and the desire among consumers to guarantee themselves a low rate for a long term contributed to the popularity of fixed-rate offers.

Loans taken out for house purchase accounted for 46 per cent of all mortgages in April, a slight increase from the 43 per cent measure in March, while remortgages made up 36 per cent of all loans.

First-time buyers took out a total of 30,700 home loans in April, with the average loan size for one of these customers £106,400, an increase from £103,839 in March.

“Today’s data confirms that the market is in good shape,” said CML director general Michael Coogan.

“The strong take-up of fixed-rate deals is encouraging because they give consumers confidence in their mortgage payments and allow them to plan ahead financially.”

The CML found that 36 per cent of all home loans taken out in April were for remortgages and that first-time buyers borrowed 3.21 times their income to get a mortgage, compared to a multiple of 3.15 the previous month.

However, mortgage payments as a proportion of income for these customers decreased from the 17 per cent high in June 2005 to 16.2 per cent in April.