Data from Paragon Bank shows more borrowers than ever are opting for five-year fix rates when choosing a mortgage.
According to Paragon’s latest Financial Adviser Confidence Tracker Index, nearly half of mortgage borrowers (46%) chose a five-year fix in Q1 2019 and 37% opted for a two-year fix. In 2014, 29% of borrowers opted for a five-year fix and 52% took a two-year fix.
John Heron, managing director of mortgages at Paragon, said: “The five-year fix has found a real sweet spot in the market. Low-interest rates, economic uncertainty around Brexit, a drop in home-mover transactions and more remortgaging means that five-year products have become a viable option for a much larger proportion of customers.”
Capital repayment mortgages continue to dominate the market, with almost eight out of ten (79%) customers opting for a capital and interest repayment product.
Interest-only mortgages, the next most popular choice, accounted for two out of ten cases (20%), with other repayment types comprising less than one in a hundred cases (0.7%).
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