Fixed-rate mortgages are predicted to see a slump in popularity with property hunters as discounted and tracker mortgages are set to increase in demand in the coming year.
GMAC-RFC has predicted the turnaround in the mortgage market as short term fixed-rate deals rise in price, the gap between fixed and discounted products has widened.
According to the Council of Mortgage Lenders, fixed-rate mortgages were the most popular type in the first half of 2007 accounting for three-quarters of mortgages. However, current fixed-rates are priced high and consumers are continuing to swap.
Corporate relations manager for GMAC-RFC Julie Gaskin comments that fixed rate mortgages have been prudent in recent years: "In a rate rising environment it often makes sense for borrowers to take out a fixed-rate deal, especially if a future rate rise would mean their monthly mortgage repayments will increase."
However, consumer appetite for discount and tracker mortgages has changed and may be cheaper in some cases, she added.
GMAC-RFC has completed £12.1 billion in mortgage deals over the past 12 months and - according to the Council of Mortgage Lenders - is the tenth largest mortgage lender in the UK.
GMAC-RFC: Mortgage market is changing
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GMAC-RFC: Mortgage market is changing
Tue, 24 Jul 2007
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