Variable mortgages increase in popularity

More borrowers took out variable rate mortgages over the past three months, according to a new report.

The research from Legal & General showed that 35 per cent of homeowners opted for a variable deal, compared to 24 per cent from the previous quarter.

Director of housing Stephen Smith stated that people were using variable offers to aid them with their debt management.

He remarked that their popularity has “been boosted by the number of borrowers sticking with their lender’s standard variable rate when they came to the end of a deal rather than remortgaging straight away”.

However, fixed rates made up the majority of the market as 63 per cent chose this kind of loan.

Two-year fixed mortgages have become cheaper – yet three, five and ten-year deals were more expensive, the organisation claimed.

Recent figures from the Council of Mortgage Lenders showed there were 47,400 house purchase loans worth £7.1 billion given out in July of this year.