CML: Long-term fixed-rate mortgages are unpopular

The Council of Mortgage Lenders has published new research into borrowers' attitudes towards fixed-rate mortgages.

Carried out by YouGov, the survey reveals a growing attraction to fixed-rate products but also a preference for shorter-term deals.

Of those questioned, 42 per cent claimed that they would choose a fixed-rate offering if they were looking for a deal today - compared to 13 per cent that would opt for a variable rate product.

Borrowers who would select a fixed-term rate would nevertheless prefer a short-term loan. The survey found that a majority would choose a mortgage of five years or under in length, while 43 per cent favoured terms of between five and ten years or longer.

The main reasons cited for being unwilling to take on a long-term fixed-rate agreement included the possibility of falling interest rates (46 per cent) and being stuck with a lender for a long time (35 per cent). However, 37 per cent concurred that long-term deals offer security against rising rates while 35 per cent would appreciate the certainty in planning their household budgets.

"In the absence of a major policy intervention from the government, the take up of long-term fixed rates looks set to remain relatively small for the foreseeable future - and the most we are likely to see is some movement from short-term to medium-term fixed rates," commented CML researcher Bob Pannell.

The CML's forecast echoes the Association of Mortgage Intermediaries' prediction in the Financial Times that long-term deals will not enjoy great uptake.