Fixed rate mortgage sales on the up

Fixed rate mortgage sales on the up

11 August 2010 / by Lois Avery

Fixed rate mortgages saw a surge in popularity in June according to new figures.

The low rate market had made fixed rate mortgages unpopular, especially as the base rate remains at 0.5per cent.

But with fixed rate prices now on the up they are starting to become popular again.

The Council of Mortgage Lenders found that 48 per cent of new borrowers took out a fixed rate mortgage in June, the highest proportion so far in 2010.

June was also the twelfth consecutive month in which lending has been higher than last year’s levels.

There were 136,000 house purchase loans, worth £19.7 billion, a rise of 20% on the last quarter and for remortgaging, the second quarter saw 77,000 loans.

First time buyers were responsible for 52,200 loans, worth £6.2 billion from April to June, up from 43,400 from January to March.

CML economist Paul Samter said:"For the time being, the effects of government spending cuts have yet to make an impact on mortgage demand, and activity continues on its upward trajectory.

"But we still expect house purchase activity to be muted in the coming months. Both consumer demand and lending capacity remain distinctly difficult to call, especially in the light of the government's austerity measures and their possible impact."

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