Borrowers show preference for fixed rates

Borrowers in the UK have shown a preference for fixed-rate mortgage deals in recent times, according to new research.

The Mortgage Monitor study by John Charcol has found that 78 per cent of mortgages featured a fixed rate in April, while the number of first time buyers fell by three per cent in the same month.

It was also found that demand for buy-to-let purchases also fell, making up 2.5 per cent of mortgage applications.

Commenting on the growing popularity of fixed-rate home loans, Charcol''s technical manager Katie Tucker said such rises usually only occur when increases in the Bank of England''s interest rate are expected.

However, she added that as the bank rate is expected to fall, "most of the high take-up was because fixed rates were a quarter to a half a percent cheaper than trackers".

In a recent interview with the Financial Times, Nationwide''s chief executive Graham Beale said that choice and availability is still open to good mortgage borrowers in the UK.

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