Fixed rate loans prove popular

According to the latest research from Mortgage Trust the number of borrowers taking out fixed-rate mortgages is at its highest level on record.For the last two years, the number of people opting for fixed-rate loans has been rising steadily. However, the latest rise over the last six months has shown the most dramatic increase in borrowers taking out fixed rate loans.According to Mortgage Trust, fixed rate mortgages, since September 2006, make up over 60% of the market. This is up from 48% before the Monetary Policy Committee had even begun their recent wave of rate hikes.John Heron, Group Director of Mortgages, Paragon Group commented: “Our research also shows that an even higher proportion of landlords have been taking out fixed-rate loans. 78% of landlords have been opting for fixed-rate mortgages in recent months. Landlords are, in the main, shrewd investors, aware of the financial environment in which they are operating. As rates have started to rise, they have sought to ensure that they remain in a financially stable position.”Those opting for shorter term deals according to the research are Landlords who choose the most popular fixed rate terms of two or three years. When the question was put forward of the least popular option, full term fixes were by far the least popular. Only one financial advisor rated them as being popular amongst their customers.John Heron continued: “Landlords clearly have their doubts about short term interest rates, with most expecting a further increase. However, their long term expectations are more optimistic, with the majority of landlords looking to benefit from improved variable rates in two years’ time. Most landlords are astute investors and will position themselves appropriately to ride out any potential disruptions in the financial market.”Homeowners opting for a remortgage could instead consider a secured loan as an alternative. Made payable over a term to suit the borrower from 5 to 25 years a secured loan is available for any amount between £10,000 and £100,000. Secured loans can be used for a number of options, whether it’s consolidating existing debt into one straightforward monthly payment or to fund home improvements, for example a new bathroom or modernising an existing kitchen with new appliances. With summer holidays just around the corner some homeowners could use their secured loan to fund a holiday of a lifetime whether it’s relaxing on a beach in the Maldives or skiing down under in New Zealand. Homeowners who are thinking of consolidating their debt should remember that borrowing over a longer term may increase overall interest charges. A secured loan is one of many options to rearrange finances.