Fixed-rate mortgages 'may suit cautious borrowers'

A property expert has speculated that fixed-rate mortgages will suit more cautious borrowers on the grounds that they offer a guaranteed, predetermined return irrespective of base rate changes.

The Bank of England recently decided to leave interest rates unchanged at five per cent, following successive increases.

Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester, said that cautious borrowers will be suited to a fixed-rate mortgage deal that will not be affected by any further increases.

"Despite two recent rate rises, there are some competitive fixed rates and trackers available for borrowers," stated the expert.

"For the more cautious, opting for a fixed rate makes sense especially as a further base rate rise may be around the corner."

Recent reports from Mortgages Direct found that fixed rate mortgages account for 97 per cent of the mortgage market.

It was also reported that the number of borrowers choosing five-year fixed-rate deals jumped by 20 per cent last month compared to figures for October.

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