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The proportion of borrowers opting for fixed rate mortgages via intermediaries are at record levels, proving that landlords are looking to cash in on cheap rates before they disappear.

A Paragon Mortgages' survey of mortgage intermediaries who specialise in buy-to-let found that canny borrowers are deciding to go for two-year fixed rate mortgages – they want to cash in now, but understand that the market might be a very different place in two years.

The panel survey of mortgage intermediaries found that 70% of cases submitted by mortgage brokers in the three months to the end of June were for fixed rate deals. This is the highest level since the lender's survey was launched in 1996 and up from 55% in the first quarter of the year and 41% in the final quarter of 2008.

Of the fixed rate mortgages, two-year terms remained the most popular with four out of 10 borrowers opting for this period, followed by a third choosing three-year fixes and a quarter opting for five-year deals.

Conversely, the proportion of base rate tracker mortgages being introduced has fallen over the period – security and safety is key for property investors right now and evading trackers might be an example of that.

John Heron, managing director of Paragon Mortgages says: "With borrowers unsure about the next move for interest rates, they appear to have been opting for the security of fixed rate deals. It is likely that the next move for base rates will be upwards, but it is unclear when that will be."

SOURCE: Paragon, 11/08/09

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