Fixed Rate Mortgage Less Popular

Fixed Rate Mortgage Less Popular.

The financial services regulator, the Financial Conduct Authority (FCA) has released its latest mortgage lending figures for the industry showing that the number of people taking out a fixed rate mortgage has fallen from 81% of all mortgages for the first three months in 2014 down to 77% for the same period in 2015. This is despite the fact that rates for fixed rate mortgages have also fallen on average over the last year.

It would appear that more people are buying in to tracker rate mortgages to take advantage of the historically low interest rates that we have had for the last seven years.

We believe this is a worrying trend.  We have been saying for years that quantitative easing (QE) is the 'Sword of Damocles' hanging over our necks and one day it will fall.  You cannot have the US simply "printing" $1 trillion in debt buying backs, the UK £375 billion, Japan the same and now Europe committed to €100bn a month.  This will all bubble back up one day and devalue currency and rocket inflation upwards.  We remember the late 70's and late 80's all too well.

Ultimately, inflation will return, interest rates will rise and those with a tracker rate mortgage will suffer. If you are a cautious investor or preferred the stability of known mortgage costs the fixed rate mortgage should still be your preferred course of action.