Changes in borrower behaviour
Analysis from Moneyfacts shows how borrowers’ priorities have shifted due to the economic impact of the Middle East conflict.
Mortgage rates have been fluctuating since March and the short-term economic outlook is still unpredictable. As such, borrowers are increasingly looking for more flexible mortgage deals in the hope that rates will come down soon. According to the data, 6% of borrowers were looking for a variable or tracker deal last September, but this figure rose to 13% in April after the outbreak of war. Meanwhile, the share of mortgage holders looking for a two-year fixed deal increased from 49% to 53%. The statistics suggest that people are reluctant to commit to a five-year deal at the moment, as searches have gone down from 27% to 23%.
Adam French at Moneyfacts said, “Demand for five-year fixes is usually strongest among homemovers, who value certainty in their monthly payments, particularly as they have usually taken on a larger debt. Instead, there has been a dramatic swing towards shorter term options.”
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Your home may be repossessed if you do not keep up repayments on your mortgage
Sources:
https://www.moneyfactsgroup.co.uk/media-centre/consumer/rocketing-rates-drive-borrowers-toward-two-year-fix-and-variable-deals/
