The demand for five year fixed rate mortgages has doubled to 24 per cent over the last month and this is set to rise, according to the Abbey Mortgage Index.
The tracker mortgage is falling out of favour, with just five per cent opting to leave their repayments vulnerable to the wider economic climate, and is having to make way for the fixed rate mortgage
, as more people say are looking for the security of knowing how much they will have to pay each month while they struggle to make ends meet with the rising cost of living.
However, it is no coincidence that the news of more people wanting to fix their rates for the long-term has come at a time when the mortgage market is shrinking as lenders, including Abbey, are withdrawing some of their mortgage deals, or, in the case of First Direct, their entire mortgage range.
A month ago, just 10 per cent of people said that they would go for five year fixed rate mortgages
; 10 per cent of people said that they would opt for a two year fixed rate mortgage compared to seven per cent a month ago, illustrating that they are also in higher demand.
Nici Audhlam-Gardiner, Director of Abbey Mortgages, said: "Recent reports about the shrinking mortgage market seem to have had a profound effect on borrowers. Not too long ago borrowers felt that shopping around regularly was the way to get the best deal, now homeowners faced with a dwindling number of mortgage deals seem keener then ever to lock themselves into a deal for longer than two years such as a five-year fix."
The study found that the popularity of tracker mortgages fell by more than half between March and April, and that six per cent of people buying a home would choose to fix their rates for 25 years if they had the option.
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