More borrowers choosing 3-year fixed rate mortgages

Michael Lloyd

December 18, 2018

Leeds Building Society has seen increased demand in recent weeks for 3-year fixes over 2-year deals, although that term has remained the most popular overall.

In response the society has added to its range of fixed rate mortgages with a new 3-year product at 1.79%, available up to 75% loan-to-value (LTV). The deal comes with incentives including a free valuation, and fees assisted legal services on standard remortgages.

Jaedon Green, Leeds Building Society’s director of product and distribution, said: “There’s been a definite spike in interest late this year in three year fixed rate mortgages, particularly for remortgages.

“2-year fixed rates are traditionally the most popular mortgage on the market, as the fixed rate gives security but the commitment isn’t too long.

“The ongoing economic uncertainty because of Brexit may be making more borrowers look for some longer-term security and three years is a useful compromise if they feel five years ties them too far into the future.”

Dilpreet Bhagrath, mortgage expert at online mortgage broker, Trussle, added: “3-year fixed rate products are becoming more popular as it gives home owners an extra year of stability, while allowing them to renew their finances frequently.

“There is still a limit to the number of lenders providing a 3-year options, so it would be great to see more lenders following suit. We’d welcome lenders to diversify mortgage products even further to suit changing consumer needs.”

The lender has also launched a new high LTV 2-year fixed rate mortgage this week, at 3.24% up to 95% LTV with no product fee.

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