Borrower are going for fixed rate mortgages Wednesday, 24th June 2009

It has been claimed that the majority of mortgage borrowers chose to fix their mortgage deal in the first quarter of this year,

Some 87 per cent chose a fixed-rate mortgage product during the second quarter of 2009 according to Legal & General.

And this is an increase from 71 per cent who chose to fix their mortgage repayments in the first three months of the year.

It is claimed by Legal & General that while average two-year fixed-rate mortgage rates climbed from 4.78 per cent in quarter one to 5.46 per cent in the second quarter, average three and five-year deals actually got cheaper.

"Borrowers who are prepared to take out variable rates have been few and far between. And who could blame them? says Stephen Smith, director of housing at Legal & General."Margins on these products are high and it's almost a cast iron certainty that when the base rate next moves, it will be upwards."

Acording to Moneyfacts,however the average two-year fixed-rate mortgage costs 5.04 per cent – while that is still an increase it is a substantially smaller one than that observed by Legal & General.