Most borrowers want a fixed-rate mortgage

The majority of people would switch to a fixed-rate deal if they were forced to remortgage tomorrow.

That is according to a new study by Abbey, which shows that uncertainty in the markets is leading people to favour the security of a fixed-rate mortgage.

It comes as turmoil in the financial markets has people concerned about rising rates and the possibility of defaulting on their mortgage.

The survey revealed that a two-year fixed-rate deal would be by far the most popular choice, with 40.3 per cent of respondents saying they would opt for this kind of loan.

A ten-year deal would follow (16.3 per cent), then a five-year (13.3 per cent), while a standard variable would be the least popular (4.1 per cent).

"Fixed-rates have always been popular in times of uncertainty when people look to gather as much security as they can from their mortgage," commented Sue Hayes, director of mortgages at Abbey.

The Bank of England has held the base rate of interest at 5.75 per cent for the last two months, fuelling speculation that interest rates may have peaked.

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