Held interest rates cause ‘buyers to seek fixed rate mortgages’
Although the Bank of England has voted to keep interest rates at 5.25 per cent today, predicted future interest rate rises could still see homeowners look to take out a fixed-rate mortgage, it has been suggested.
According to mortgage firm John Charcol, predictions that the base rate will rise at least once before the end of the summer will cause more consumers to fix payments on their home loans.
Senior technical manager Ray Boulger said: "The market is fully discounting one more bank rate increase and so this is already priced into most fixed rate mortgages.
"However, many borrowers will still prefer a fixed or capped rate for the budgeting certainty and consequent peace of mind they offer."
Mr Boulger added that following three interest rate increases since August, the property sector was beginning to dampen, particularly with mortgage approvals.
Despite this, he reported property growth in London and the south-east "is still strong" due to a shortage of homes for sale.
Last month the Council of Mortgage Lenders reported that in January a record amount of first-timer buyers looked to get a fixed-rate mortgage to keep their home loan payments consistent.
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