Shoppers looking for fixed-term deals remains strong in December

Interest in fixed-term mortgages has remained strong in December, new analysis from Experian reveals.

Today, the BofE announced it had voted to leave Base Rate at 0.75% – its highest level since 2009 – after it was raised by a quarter of a percentage point in August.

Analysis of data from Experian Marketplace shows 89%* of mortgage shoppers in December are looking at fixed-term deals, up from 85% in November and 83% in October.

In comparison, interest in tracker mortgages is flat, accounting for just 6% of searches in the three months.

The findings suggest that the increase in the cost of borrowing in August has discouraged potential homeowners from considering tracker mortgages as an attractive option for their home loan.

Amir Goshtai, Managing Director of Experian Marketplace and Affinity, said: “Interest in fixed-term deals shows no signs of slowing down as consumers look to protect themselves from future rate rises, while growing uncertainty about the economy could also be playing a part.

“It’s understandable that fixing is proving to be popular, as potential homeowners enjoy the security of knowing what their monthly payments are, but it’s important they consider all their options when it comes to their mortgage.”

Previous analysis from Experian found mortgage holders could find themselves overpaying by £1,800 a year if they fail to switch deals when their introductory rate finishes and they slip onto their lenders’ Standard Variable Rate (SVR).

Based on the average mortgage amount taken out by Experian customers in October of £151,955 with a typical SVR of 4.39% over a 25-year term, the monthly payment is £822.41 a month.

But with customers being offered an average initial rate of 2.38% in October, they would be repaying £672.55 a month – a difference of £149.86 monthly and £1,798.32 annually.

Potential homebuyers can check their mortgage eligibility with Experian, giving them the opportunity to find out which mortgages they are likely to be accepted for and how much they could borrow, based on lenders’ criteria.