CML: Fixed-rates continue to be popular

New figures have shown that short-term fixed-rate mortgage deals continue to be popular with first-time buyers (FTBs) and people moving home.

A report by the Council of Mortgage Lenders (CML) found that 89 per cent of FTBs chose fixed-rate mortgages in May, compared with 88 per cent in April.

Similarly, the number of home movers choosing to take out fixed-rate deals increased from 72 per cent to 73 per cent during the same period.

CML director general Michael Coogan said: "Taking out short-term fixed-rate mortgages may provide some reassurance, but eventually the loans will revert to a variable rate and the risk of a payment shock is real."

Householders ought to plan ahead to ensure they are able to cope with higher borrowing costs further down the line, he added.

Commenting on the CML's findings, Oliver Gilmartin, senior economist at the Royal Institution of Chartered Surveyors, said that the stamp duty threshold ought to be raised to help ease affordability pressures for FTBs.

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