Fixed-rate mortgages for fear of rate rise

In a bid to avoid taking on extra debt if the rate rises, more people are turning to mortgages where they know how much they will have to repay each month, figures from My Mortgage Direct reveal.

“With no Bank of England base rate rise for nearly a year now, borrowers are getting increasingly apprehensive of a rate hike as each month goes by,” said Cath Hearnden, joint director at My Mortgage Direct.

With widespread expectations of an increase in the base rate, people are avoiding mortgages linked to it as this would increase the amount they repay each month.

According to the survey, 48 per cent of mortgages sold in June were tracker deals, while fixed-rate mortgage deals made up 44 per cent of home loans.

By being able to budget for mortgage repayments in the knowledge it will not change until the end of the deal, it appears that many more people are taking action now to avoid spiralling debt if rates go up.