The research found that 21 per cent of homeowners would opt for a three-year fix, compared to nine per cent who would choose a two-year fixed rate deal and eight per cent who would fix for five years. The decline in popularity of five-year deals from a high of 22 per cent last month suggests that borrowers are now more optimistic of mortgages remaining affordable over the short term, possibly fuelled by a number of lenders reducing their rates.
Abbey Mortgages' research also reveals that demand for tracker mortgages has remained steady throughout 2008. Eleven per cent of homeowners would opt for a tracker mortgage if remortgaging tomorrow, compared to 10 per cent in July and 12 per cent six months ago.
Overall, fixed rate mortgages are increasing in popularity. Approximately 52 per cent would now opt for these products compared with 47 per cent last month and 35 per cent six months ago.
A large number of homeowners claim they are unsure about which mortgage they would choose if they were to remortgage. Just over a third (36 per cent) said they were unsure which type of mortgage they would opt for compared with 41 per cent last month.
Phil Cliff, Director of Abbey Mortgages, commented "We are amongst those lenders who have recently reduced their rates and this seems to have inspired the confidence of borrowers. Deals such as our three year fix at 5.69% are proving very popular as mortgagors opt for the middle ground between the short two-year fixes and committing to a five-year deal."
