Those hoping to secure a mortgage currently face a difficult decision with regard to the type of home loan to opt for.
This is according to Defaqto, which has noted people have to choose whether to plump for a fixed or variable rate, as well as select an initial rate period.
David Black, banking specialist at the independent financial research company – which has been in operation since 1994 and now covers more than 30,000 products – explained 75 per cent of mortgage products available from lenders at present are made up by two, three and five-year fixed rates, as well as the two-year base rate tracker options.
Mr Black observed would-be borrowers have to “take a view on whether to pay a premium for the certainty of a fixed-rate mortgage or to take a chance on suffering possible future rate increases”.
He pointed out the average fixed-rate deal includes a 0.3 per cent to 0.8 per cent higher interest rate than that seen in a typical base rate tracker option when considered from the same initial rate period.