Fixed rates mortgages "come of age"

Monday, 22 February 2010 11:37

By myfinances.co.uk staff

Over 21 years after they were launched, fixed rate mortgage deals have "come of age", accounting for 68 per cent of new lending in 2009.

Halifax, which launched the first fixed rate mortgage in 1988, said that by February 1989, there were 12 of these deals available from 12 lenders. Today, consumers can choose from more than 1,300 products from 69 providers.

In 1989, when the Bank of England's base rate stood at 13 per cent, the average rate for a fixed mortgage deal was 12.55 per cent, Halifax said.

Today, with rates at 0.5 per cent - the lowest level since the Bank was established in 1694 - the typical fixed rate mortgage has a rate of 5.38 per cent.

Halifax said demand for the products has been fuelled by consumers looking to insulate themselves against future increases in the base rate.

Stephen Noakes of Halifax said: "Ever since their introduction 21 years ago, fixed rate mortgages have been fundamental for homeowners looking for certainty and stability in managing their household expenses and this is an important milestone to mark."

Overall mortgage lending stood at £9.1 billion in January, according to the Council of Mortgage Lenders.

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