Fixed-rate mortgages still popular

New figures from the Council of Mortgage Lenders (CML) show that fixed-rate mortgages are still proving popular with large numbers of UK mortgage customers.

The CML claims that 89% of first-time buyers and 73% of home movers took out a fixed-rate mortgage in May; a rise of 1% on figures from April which showed 88% of first time buyers and 72% of home movers opting for the safety of a fixed rate product.

Michael Coogan, director general of the CML, said that although opting for a fixed-rate mortgage on a short-term basis "may provide some reassurance", he also said "eventually the loans will revert to a variable rate and the risk of a payment shock is real".

He added: "Planning ahead for higher payments is as important as the initial decision to shelter from the risk of higher borrowing costs."

The CML also states that affordability problems are also growing for a large numbers of UK homebuyers, with its figures in May showing that first-time buyer income multiples reached 3.37 time salary during the month, a ride from 3.33 times salary in April.