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Consumers prefer fixed rate mortgages

Date: Mon, 23 May 2005

According to Mortgages Direct, 84 per cent of customers are choosing a fixed rate deal, compared to 30 per cent at the same time last year.

Just over 45 per cent of borrowers opted for a two-year fixed deal, with 18 per cent choosing three years fixed and 21 per cent selecting a product with a fixed rate for five years and over.

"Despite the Bank of England's decision to freeze interest rates, with a substantial increase in the percentage of borrowers opting for a fixed rate loan from last year, it is clear there is an overwhelming fear that interest rates will increase further," said Peter Gladdy of Mortgages Direct.

Fixed rate mortgages are popular with many first-time buyers as it allows them to adequately budget for the cost of setting-up a new home.

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Endsleigh Insurance Services Limited. Company No: 856706 registered in England at Shurdington Road, Cheltenham Spa, Gloucestershire GL51 4UE.