"It’s clear to see that the benefit of certainty at such low rates is continuing to drive up the popularity of fixed rate mortgages"
Between January and March 2017, 89% of mortgages introduced were fixed rates, up 6% on the previous quarter and the highest figure in the survey’s 20-year history.
This continues a long-term upward trend that has risen particularly sharply since the end of 2010 when fixed rate and tracker mortgages comprised 46% and 45% of all cases respectively.
In the same seven-year period, tracker mortgages have declined at almost exactly the same pace and in Q1 2017 accounted for just 10% of mortgage business, its lowest ever level.
Two year fixed rates are still the most popular product, despite declining to 48% in Q1 2017 from 53% three months earlier. The most notable shift in Q1 was another increase in popularity of five year fixes, up 3% to 34% of all mortgages.
Following a period of disruption last year, buy-to-let lending stabilised in the first quarter of 2017, accounting for 18% of all mortgages handled, whilst remortgaging remained the most common type of borrowing.
In terms of buy-to-let lending, remortgaging accounted for 47% of all business, maintaining a steep upward trend since Q3 2013, whilst lending to first time landlords eased to 15%, continuing a long-term decline from 27% in the same period.
John Heron, Managing Director, Paragon Mortgages, said: “It’s clear to see that the benefit of certainty at such low rates is continuing to drive up the popularity of fixed rate mortgages – particularly five year fixed terms, which gained further ground in Q1 2017."
