Brexit uncertainty may be encouraging borrowers to consider fixing their mortgage for longer, according to an analysis of demand.
The Leeds Building Society says that it has seen increased demand in recent weeks for three year fixes over two year deals, although that term has remained the most popular overall.
In response the Society has added to its range of fixed rate mortgages with a new three year product at 1.79%, available up to 75% LTV (loan to value).
The deal comes with incentives including a free valuation, and fees assisted legal services on standard remortgages.
‘There’s been a definite spike in interest late this year in three year fixed rate mortgages, particularly for remortgages,’ said Jaedon Green, Leeds Building Society’s director of product and distribution.
‘Two year fixed rates are traditionally the most popular mortgage on the market, as the fixed rate gives security but the commitment isn’t too long. The ongoing economic uncertainty because of Brexit may be making more borrowers look for some longer term security and three years is a useful compromise if they feel five years ties them too far into the future,’ he added.
The Society has also launched a new high LTV two year fixed rate mortgage this week at 3.24% up to 95% LTV with no product fee.
Meanwhile, the latest figures show that the second charge mortgage market recorded its strongest rate of new business volumes growth so far in 2018 in October.
The figures from the Finance and Leasing Association (FLA) show that in total, there were 2,319 new agreements in October, a 19% increase on last year’s figure for the month, and in the 12 months to October, some 22,932 deals, a 5% change when measured on a yearly basis.
The FLA adds that there was a 5% increase in the 10 months to October, and overall the growth represented a total value of just over £1 billion for the, up 3% year on year.
‘With new business volumes up by 5% in the 10 months to October 2018, we continue to expect single digit growth in 2018 overall,’ said Fiona Hoyle, FLA head of consumer and mortgage finance.
