New research has revealed that fixed-rate mortgages are the most popular type of home loan in 2024, with almost a third of homeowners opting for the security of fixed monthly payments.
A survey of 4,950 people by Compare the Market found that 28% of respondents considered a fixed-rate mortgage when looking at their options. This makes it the most popular choice for homeowners, followed by repayment mortgages (20%) and 10-year fixed-rate mortgages (17%).
The popularity of fixed-rate mortgages is likely due to the current economic climate, with many homeowners concerned about the potential for interest rate rises.
Here’s a breakdown of the findings:
Most Popular Mortgage Types:
- Fixed-rate mortgages: 28%
- Repayment mortgages: 20%
- 10-year fixed-rate mortgages: 17%
- Joint mortgages: 13%
- Tracker mortgages: 11%
Why are fixed-rate mortgages so popular?
Fixed-rate mortgages provide homeowners with the peace of mind of knowing exactly how much their monthly payments will be for the duration of the fixed-rate period. This can be especially helpful for those on a tight budget, as it allows them to budget effectively without having to worry about potential interest rate hikes.
What about other mortgage options?
While fixed-rate mortgages are the most popular choice, there are a range of other mortgage products available to suit different needs and circumstances.
- Repayment mortgages are a good option for those who want to pay off their mortgage as quickly as possible.
- 10-year fixed-rate mortgages offer the security of fixed monthly payments for a longer period of time.
- Tracker mortgages can be a good option when interest rates are low, but they can be risky if rates rise.
The survey also found that bad credit mortgages are the least popular type of mortgage, with only 5% of respondents saying they would consider this option. This is likely due to the higher interest rates and fees associated with these mortgages.
Almost a third of homeowners wouldn’t consider a mortgage
The research also found that 32% of respondents said they would not take out a mortgage at all. This could be due to a number of factors, such as concerns about the economy, job security, or the rising cost of living.
Thinking of getting a mortgage?
If you are thinking about buying a home or remortgaging your current property, it is important to speak to an independent mortgage advisor to find out which type of mortgage is right for you.