Fixed Rate Deals on Rise

The figures released by the Council of Mortgage Lenders reveal that fixed rate mortgage deals are on rise significantly. In June alone, 52,000 mortgages were advanced for house purchases which showed an increase of 19% than in May and 14% more than in June 2009.

The low interest rates prevailing at present accounted for the popularity of fixed rate mortgages.

As the expenditure on household items and foods increase, peoples are looking for some added security against the rising interest rates. Since March 2009, the Bank of England has been maintaining the low interest rate of 0.5%, which is likely to remain until next year.

Despite the growing trend in mortgages, the CML expects that the housing market may go dim when the effects of government cuts start to make impacts on mortgage finances.

According to Paul Samter, economist, CML, the house purchase activities may get muted in the coming months; both consumer demand and lending capacity remain difficult when the government’s adverse measures take into effect.

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