Homeowners switch to fixed rates

With interest rates unlikely to fall any further, many Contractors are choosing to switch back to a fixed rate mortgage in order to cash in as rates begin to rise again.

According to the Council of Mortgage Lenders (CML) the number of homeowners opting for a fixed rate mortgage is at its highest since June 2008, with 69% of borrowers taking out fixed loans in April. There was also an increase in the overall number of loans for house purchase which suggests an increase in activity in the housing market.

Mortgages are also becoming more affordable with statistics from the CML revealing that home movers are typically spending 11.3% or their income on mortgage interest payments which is the lowest it has been since November 2003.

Bob Pannell, head of research at CML said that many homeowners are choosing to switch to fixed rates now that the interest rate cycle is at its lowest point and many of them are choosing to opt for longer terms of between 5-10 years to keep their repayments low for longer.

If you are moving house or are about to come to the end of your current mortgage term then you may find it beneficial to switch to a fixed rate mortgage as this should help to shield you from any rises in the base rate that will affect those on tracker mortgages.

The expert mortgage advisers at ContractorFinancials can help you to find the best mortgage for your needs and our relationship with lenders means that we have access to mortgages based on your annualised contract rate alone So your Contractor status needn't be a hindrance.

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