Almost half of mortgage customers (49%) are opting for a fixed period of at least five years, Paragon’s latest Financial Adviser Confidence Tracking (FACT) Index has found.
Comparatively in 2013 just one in four (25%) opted for a fixed period of more than five years.
In the first quarter of this year only 37% opted for a 2-year fix, down from 54% in 2013.
John Heron, managing director of mortgages at Paragon said: “The 5-year fix has found a real sweet spot in the market.
“Low interest rates, economic uncertainty around Brexit, a drop in home-mover transactions and more remortgaging means that five year products have become a viable option for a much larger proportion of customers.”
The majority of mortgage intermediaries (90%) highlighted low interest rates coupled with concern over future rate rises as the key factor behind the popularity of the 5-year fix.
Customers’ preference for long term certainty on payments was also highlighted as important by three quarters (76%) of brokers.
However a number of advisers stressed that long-term fixes are only suitable for customers who expect to stay in their current home for an extended period.