New figures from a mortgage brokers show that home buyers are choosing three-year or longer loan deals.
Consumers are opting for longer mortgage deals than in the past, according to mortgage brokers Mortgageforce.
Some 56 percent of all fixed-rate deals taken out from the firm in May were three-year or longer, despite two-year fixed mortgages having been more popular in the past. The company's technical manager Katie Tucker suggested that the trend was due to consumers being savvy about current financial conditions.
"Two-year fixes were always the favourite, or trackers when the Bank rate is widely expected to fall, but this rush to commit long term shows that consumer attitude has turned a corner," she explained. "Borrowers who have been weighing up the chances of lenders realistically cutting rates any further, versus the chance of Bank rate being increased in the next few years, the equity left in their properties, and even their job security, are choosing to commit now."
The Bank of England base rate is currently at a historically low value of 0.5 percent, after steady cuts were made to the rate as the financial crisis worsened. However, the Bank has refrained from making changes to the rate in recent months and has instead opted for other measures to stimulate the economy, such as quantitative easing - the modern-day equivalent of printing money.
