Borrowers seek security

This is the finding of the latest Spicerhaart Financial Services monthly mortgage survey. The survey shows that while the number of short term two-year fixed deals has plummeted, dropping to just over 18% (having accounted for 60% of all deals in June 2007), long term fixed rate deals of four years or more are at their highest level, over 34%.

Borrowers are not only switching from short to long term fixed rates, but also from variable to fixed mortgages, with the number of borrowers choosing variable products dropping from 28.7% in January to 14.7% last month.

As well as security, consumers are also attracted by the financial advantages of choosing a longer term product. The average two year fixed mortgage is 7.07%, compared to the average five year at 6.93%.

Encouragingly, the survey also shows that first-time buyers are playing a larger part in the current market, totalling almost a third of all borrowers, having risen over 2% from May to June.