Shorter-term fixed rate mortgages have increased in popularity, with more borrowers opting for two-year fixed rate products, the latest resaerch from Paragon shows.
Two-year fixed rate mortgages accounted for 39% of mortgage business introduced in the third quarter of the year, up from 37% recorded in Q2 2019.
Whilst fixed periods of five years or more remain the most popular, the proportion of mortgage customers opting for a long-term fix dropped from 51% in Q2 to 46% in Q3.
Unsurprisingly, fixed rate mortgages (89%) were still the overwhelming preference over tracker rate mortgages (9%).
John Heron, director of Mortgages at Paragon, said: “Five-year fixes started to overtake two-year deals at the end of 2017 and have been growing in popularity since, driven by historic low rates, tax hikes for owning additional homes and political uncertainty.
“As the UK heads into a general election, it’s interesting to see an increase in the proportion of homeowners looking for shorter to mid-term products as a way to retain stability but allow themselves the opportunity to reassess in two-years’ time, when the Brexit situation and its impact on the economy and the housing market is clearer.”