Key findings from Mortgages Direct survey for May reveals:
- Mortgage borrowers show optimism of imminent decrease in interest rates with an 8% increase in tracker mortgages from last month.
- Fixed rate lending has decreased by 4% over the last month.
- Two year fixed rate deals remain the most popular type of fixed rate mortgages
- An increase of 6% of borrowers opted for repayment mortgages from last month.
- First time buyer levels increased by 5% point to 40% of total mortgage applications
The latest data from Mortgages Direct shows a significant increase of 8% of mortgage borrowers that have opted for tracker mortgages from last month, from 1% in April 2005 to 9% in May 2005.
More borrowers have also opted for variable mortgages with a 7% increase from April 2005. The changing trend in the popularity of variable and tracker mortgages reflects that mortgage borrowers are more confident that interest rates will drop.
Peter Gladdy, Director of Mortgages Direct comments: “Despite the Bank of England’s decision to freeze interest rates for the time being, the substantial increase in the percentage of borrowers opting for tracker mortgages and variable mortgages over the past month hints that consumer confidence has switched. There is a growing belief that the Bank of England will decide to lower the interest rates in the imminent future.”