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Property owners ignoring fixed rate finance deals, research suggests

New research reveals standard variable rate (SVR) mortgage is still the preferred option with 37% of homeowners, rising from 35% from January 2011. The average rate home owners would be prepared to fix at is now just 3.4%, dropping from 4.0% in January 2009, according to data from

It also found that 46% of homeowners haven't reviewed their mortgage at all since March 2009 when the base rate first reached 0.5%. Yet with the Bank of England base rate remaining at 0.5% for a record 31 months, home owners may be missing out on the lowest fixed rate deals on the market.

With SVRs remaining lower than best buy fixed rate mortgage deals in the current market place, it appears homeowners are still refraining from remortgaging to a fixed rate deal until the base rate starts to rise.

When it comes to fixing however, the rate home owners would be prepared to fix at now is an unrealistic 3.4%. This has dropped from an average 4.0% in January 2009. The research points out that the last 24 years has never seen five year fixed rates lower than 4.99% and the current average three year fixed rate is 4.35%.  Despite the current market conditions and fixed rates reaching an all time low, home owners remain out of touch with what is available to them, it says.

However, fixed rate mortgages do remain popular with 18 to 34 year olds, where 44% currently have one, a rise of 6% from 38% in January 2011. This suggests the security of a fixed rate is attractive to the first time buyer market.

‘Once rates begin to rise so will the price of fixed rates, meaning that now could well be the perfect time review their mortgage finances and move to guard against the potential of increased payments in the future,’ said unbiased chief executive Karen Barrett.

‘The low base rate has also had a dramatic effect on homeowners' rate expectations with our research showing a stark contrast between what consumers would be willing to fix their mortgage to and the average rate available,’ she explained.

‘It can be very confusing for homeowners to keep track of which is the best mortgage for them and when is the best time for them to move onto a new deal. Home owners should seek whole of market mortgage advice now to ensure they get the best deal from the whole of the market at the right time,’ she added.