Second-time buyers are “dominating demand” for longer-term fixed rates of three years or longer, a report says.
The report, which looked at consumers comparing fixed term mortgage deals through September by borrower type and term, found that 58% of second-time buyers are looking for three years or more, which compares to a total of 45%.
Around a third of first-time buyers and those looking to remortgage were looking for longer-term fixed rates of three years or more.
When looking at consumer demand for fixed rates of two years or fewer, approximately 69% of first-time buyers were looking for such deals, followed by 66% of those looking for a remortgage.
Only 42% of second-time buyers were looking for fixed rate terms of two years or fewer.
Adam French, head of news at Moneyfactscompare.co.uk, said: “Many second-time buyers may be making peace of mind a priority by seeking longer-term mortgage deals, despite the general expectation for rates to keep slowly falling in the short-to-medium term. Instead, they are prizing stability, predictability and protection from volatility – particularly if they have borrowed more and increased their exposure to unforeseen rate rises.
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“The Moneyfacts average two- and five-year mortgage rates are currently at 4.98% and 5.02%, respectively. However, given that inflation is currently predicted to sit above the Bank of England’s 2% target until at least 2027 and that the cost of government borrowing has been climbing, there are still plenty of economic challenges on the horizon, which may influence mortgage rates and borrower behaviour in the future.”
