According to a new survey, mortgage advisor customers are choosing a three-year fixed mortgage in anticipation of rising interest rates.
Tuesday, July 27, 2021 9:13 AM
A recent study of the advisor market by economist Tony Alexander reveals that more customers are moving from short-term to long-term fixed mortgages.
According to the report, more than half (54%) of advisors say their clients now prefer a three-year mortgage.
This number has risen rapidly in recent months. In June, only about 30% liked 3 years, but in May that number was about 15%.
Alexander said of the findings: “The fixed interest rate on mortgages has run its course, and there has been a clear change in the term preferences of those who are considering forecasting higher interest rates.
“In February, 73% of mortgage advisors said buyers prefer one-year interest rates. In April, that percentage dropped to 39%, down from 30% last month to 5% this month. Only agents evaluated the one-year interest rate, which is most favorable.
“In recent months, people have moved away from the one-year fixed term, which has definitely shifted to a two-year term, but this month its preference has declined slightly. Currently, the most preferred term for borrowers is three years. “
Heartland Bank’s 2.45% online mortgage remains the cheapest three-year interest rate on the market, followed by HSBC Premier at 2.69%. SBS Bank offers a 2.79% rate.
In addition to changes in the mortgage market, Alexander’s latest research also noted that the pace of investor withdrawal from the market has slowed.
A net 19% of advisors reported that fewer investors were seeking advice, but less than in the last four months.
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Clients switching to a three-year term
Source link Clients switching to a three-year term