Number of five-year deals doubles in five years: Moneyfacts

The number of five-year fixed rate mortgages on the market has almost doubled over the past five years, according to analysis by Moneyfacts.co.uk.
The comparison site’s data shows there are currently 1,542 deals available compared to 796 in 2014.
The biggest increase has been in the 75 per cent loan-to-value tier, where numbers have jumped from 138 to 303.
At 90 per cent LTV, the number of deals on offer has jumped from 132 to 267
Moneyfacts finance expert Darren Cook says: “Two-year fixed rate mortgage deals have historically dominated borrower market choice, however with the number of five-year fixes increasing significantly over the past five years, it is clear that borrowers now have an even choice of products available in both the two and five-year fixed rate mortgage markets. “
Cook says that data recently released jointly by the Bank of England and the Financial Conduct Authority shows the extent to which fixed rates have come to dominate the market.
Fixed rates constituted just under 42 per cent of outstanding mortgage balances in the second quarter of 2014, but now they make up almost 74 per cent.
This trend looks set to continue as 92 per cent of all new mortgages were fixed rates in Q2 this year.
Cook says that with fixed rates close to historic lows, lenders are in fierce competition to grow their mortgage books and also to retain existing borrowers.
He adds: “Historically, borrowers seemed to have preferred the short-term commitment of a two-year fixed rate deal, but now that product availability has significantly increased in the longer-term five-year mortgage market, borrowers may be looking beyond interest rates and more towards the stability of setting monthly mortgage repayments and hedging themselves against uncertain economic conditions in the longer term.”  
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