More homeowners considering fixed-rate mortgages

25 January 2010

Over 880,000 homeowners may be looking to remortgage in the next six months, according to banking group Santander, with an increasing number looking to fixed-rate mortgages in order to beat any forthcoming interest rate rises.

Santander`s research found that just 13% of homeowners due to remortgage in the next six months are planning to choose a tracker deal, down from 33% just two months ago.

By contrast, the proportion considering a fixed-rate deal has increased from 20% to 23% over the last month, with exactly half of these favouring a two-year deal over a three-year or five-year deal.

A mortgage expert for Think Money commented: "Mortgage holders take a bit of a `gamble` with whichever type of mortgage they choose. A fixed-rate mortgage will protect against rises in interest rates, but also won`t benefit from falls in interest rates. Conversely, tracker rates will go up or down depending on what happens to the base rate.

"It can be hard to decide what type of mortgage to choose, and it`s always worth speaking to a mortgage adviser before making a decision."

Tags: mortgage, remortgage, fixed rate, tracker rate, type, types, type of mortgage, interest rates, mortgage interest rate types

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