Fixed Rate Loans Reach Age 21
These days, when somebody is looking for a new home owner loan, or personal loan, one of the most popular options is the fixed rate loan and the vast majority of people just take them for granted and assume that fixed rate loans have always been there.
But the concept of a fixed rate loan has just “come of age” and to mark the 21st anniversary of these popular loans, the Halifax, who introduced one of the first ever fixed rate loans, has published research which compares today’s loan products with those that were available on the market back in November 1988.
Towards the end of the Eighties, there were no fixed rate deals available and with interest rates on variable rate loans at a level of around 13 per cent, a fixed rate loan offering some level of stability was a welcome change for many borrowers.
We may think that there is a limited choice of loan products today, but in February 1989, there were only 12 fixed rate loan products available, from 12 different banks or building societies, compared with more than 1300 such loan products in today’s market.
It is hard to imagine that prior to November 1988 there were no fixed rate products on the market, particularly when the Council of Mortgage Lenders (CML) figures now show that around 68 per cent of all home owner loans are taken on a fixed rate basis.
Stephen Noakes of the Halifax said “in today’s market, borrowers can select their product based on a number of factors including term, type and rate. It’s easy for us to take that level of choice for granted, but before the introduction of fixed rates, borrowers simply didn’t have access to the same options. Ever since their introduction 21 years ago, fixed rate mortgages have been fundamental for home owners looking for certainty and stability in managing their household expenses and this is an important milestone to mark.”
