Fixed-rate most commonly considered mortgage product

The research, which surveyed 4,950 UK consumers, found that 28 per cent of respondents said they would consider taking out a fixed rate mortgage in the future.

The second most popular mortgage type is a repayment mortgage, which 20 per cent of respondents said they would consider.

However, 9 per cent of respondents said that they would not consider a repayment mortgage due to concerns about future rate increases, and another 9 per cent they wouldn’t because of lender-controlled interest rates.

In third place is a 10-year fixed rate mortgage, which almost one in six respondents (15 per cent) said they would consider.

This is a fixed-rate mortgage where the interest rate remains the same for a period of 10 years, which can be beneficial as it protects borrowers against increases in interest rates and saves money on fees.

However, Compare the Market pointed out that there are downsides as 13 per cent are put off by the long commitment period, and 11 per cent said they wouldn’t consider this due to not being able to benefit from potential rate decreases throughout their mortgage term.

The least popular form of mortgage was found to be bad credit mortgages as only 5 per cent of respondents said they would consider taking one out, despite 20 per cent of Brits having poor credit scores.

People mainly said they would avoid this because of higher monthly and therefore disposable income, mentioned by 12 per cent, and higher interest rates for those with bad credit, mentioned by 11 per cent.

The research also reported that 28 per cent of Brits wouldn’t take out a mortgage.

“This may be due to financial barrier, with people prioritising financial security over home ownership, or having general concerns about taking on a long-term financial commitment when there’s some economic instability,” the research stated.

tom.dunstan@ft.com

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