Faith in low-rate economy boosts variable product demand

Borrowers’ faith low interest rates will be here for the next few years is reflected in the rise of variable rate mortgage demand, seen in the first quarter of the year.

The findings emerged from feedback provided by Sesame intermediaries who reported an increase in the popularity of trackers and discount mortgages compared to fixed rate products.

Fixed-rate borrowers coming to the end of their product terms are now looking at variable rate alternatives after the anticipated rate rise, predicted to kick in at the start of this year, failed to materialise.

Senior products manager at Sesame Rob McCoy (pictured), said the two-year fixed rate was losing its shine.

“People have not seen the benefit of locking in to fixed rates because the base rate isn’t changing,” he said.

He added: “Furthermore, the low interest rate outlook remains the same…”

McCoy said discount products have become more competitive than fixes, which are affected by the swap rates market so discounts were also coming out ahead in the affordability stakes. “Discount rates are dropping so it works out cheaper in many cases,” he said.

Paul Flavin, mortgage broker and owner of Zing Mortgages, said he had received more enquiries for discount products rates since rates had started to fall but fixed rates were still ahead in popularity particularly as the looming Brexit vote cast uncertainty over whether rates would remain low.”

“We could see tracker and discount enquiries pick up if the country votes to remain within the EU,” he said.

Back to news
Beside you all the way
At Zing, we’re here to help you throughout your mortgage application. From your first enquiry through to completion - we’re here to make the whole process easier for you.
03332 414 113
Monday - Friday: 9:00am - 5:00pm
What our clients say
4.9/5
Efficient and Excellent Experience
1st time buyers and they made the whole process really easy from start to finish. Kept us up to date throughout and answered any questions we had strait away. Thank you Zing
Rion in Sevenoaks
Best choice we made
Gary was patient & understanding when dealing with our mortgage. Ellie was brilliant with weekly updates that increased to daily as we neared completion. Can't thank the team at Zing enough, would recommend to anyone.
Julie in Southend-On-Sea
Great service
Great service from start to finish. Lee was very knowledgable and got us the deal we where looking for. Was kept informed and he was always available, or called us back. Would highly recommend.
Brian in Ware
Excellent
Very nice service I will recommend it to my friends and if I need will use again. Very big thanks for Ian.
Volodimir
Good overall service
We have used zings services for a number of years now and have always been very happy with there services, although we had a bit of a slow start this time everything was completed well and would recommend them again for the future.
Steve in Essex
Would recommend
They chased the solicitors continuously for what was a long tome! They kept me up to date throughout which I really appreciated
Denise
Feefo logo