28
Aug
Consumers 'switching to fixed-rate mortgages'
The uncertainty over the future direction of interest rates has
prompted more people to take out fixed-rate loans, Nationwide has
said.
As the lender announced its latest house price figures it revealed
that fixed-rate deals are now more popular than trackers, although
the latter deals have been cheaper on average since October
2007.
Nationwide chief economist Fionnuala Earley said: "This change in
behaviour could be an indication that borrowers are keen to be sure
of their outgoings in uncertain times and wish to protect
themselves."
Ms Earley also noted that borrowers are keener on taking out
long-term fixed-rate mortgages, with research by Nationwide showing
that 43 per cent more have said they are more likely to choose such
a deal now than12 months ago.
The uncertainty felt by consumers may arise from the fact that the
Bank of England's monetary policy committee has been divided over
the question of interest rate policy as it deals with the
conflicting threats of rising inflation and falling growth.
In each of the last two meetings the majority has voted to hold the
rate, but Tim Besley has supported an increase while David
Blanchflower has voted for a cut.
