Rise in preference for longer-term mortgages
New research has found that for the first time, more people are choosing to take out longer-term mortgages than two-year deals.
According to Paragon, Quarter 4 of last year saw almost half (48%) of applications being made for deals lasting 5 years or more. In comparison to the previous quarter, this a rise of 7% and is up 15% on the correspondent period in 2016.
Two-year deals, on the other hand, saw a decline of 7% in Q4 of last year, representing 40% of fixed and tracker cases.
The final quarter of 2017 also saw an uplift in the preference for fixed rates, with the proportion growing to 91% of all cases, up by 2%.
Returning to a proportion of 52%, buy-to-let remortgaging continues to drive the market. This has largely been attributed to the preferable interest rate.
Commenting on the figures was John Heron. Paragon’s managing director highlighted the market preference for fixed-rate products, as well as the more recent shift towards longer-term deals.
“The results of our latest intermediary research highlight the overwhelming preference that the market has for fixed-rate products and increasingly for longer term fixed rate products. Much of this is driven by the understandable requirement that landlords have for payment stability into the future against an uncertain economic backdrop.”