Borrowers are flocking back to fixed rate mortgage deals, the latest statistics from the Council of Mortgage Lenders (CML) have revealed.
According to the CML, 69 per cent of borrowers took out a fixed rate mortgage
in April, with an average interest rate of 4.83 per cent.
Commenting, CML head of research Bob Pannell said: "With the interest rate cycle now at its floor, an increasing proportion of borrowers are taking out fixed rates, including for longer term periods of 5-10 years.
"With expectations for rates to remain low in the near future, short term fixed rate deals are less appealing than attractively priced variable rate deals," he added.
The news comes as the CML also reports a 16 per cent increase in the number of loans agreed for house purchase in April, compared to March. Although mortgage
lending remains 28 per cent lower than in April 2008.
Mr Pannell added: "There are tentative signs of house purchase lending stabilising, but we need to see considerably higher transaction levels to underpin house prices."
The statistics also showed that life in the mortgage market did not get easier for first time buyers in April, as the average first time buyer mortgage
deposit remained at 25 per cent – it has remained unchanged since February.
However, the CML stated that the slowing rate of decline in measures like high deposits and low loan values, coupled with the recent reintroduction of a number of higher loan to value (LTV) mortgages may, "indicate an easing in criteria in coming months advances."Get mortgage quotes and advice »
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