With all the talk of rising interest rates, Oliver O'Driscoll and his partner Kim Loy are glad they plumped for a five-year fixed-rate mortgage when they bought their flat at the end of November. The couple's broker had suggested a Santander five-year fix set at 3.14%, but also drew their attention to a two-year fixed deal with a slightly lower interest rate. They decided to go for the former. "For me and for Kim, it was the certainty of knowing we have that rate for the next five years should circumstances change - for example, if we have a family," says O'Driscoll, 33, who works as an account manager. He and Loy, 30, who works as a project manager, moved into a two-bed ground floor basement flat in south London . They were able to put down a 25% deposit. O'Driscoll's guess is that interest rates might go up in two years' time or sooner. "That was part of our thinking in going for the five-year - that in the long term it would be more prudent. Even if my wages didn't go up over the next five years, I know I could cope with those payments each month." He adds that there wasn't enough of a difference between the two-year and the five-year deal in terms of the rate to tempt them to go for the two-year fix. The couple used London -based broker Prolific Mortgage Finance, which said: "The five-year deal with Santander was a market leader, and it gave Oliver and Kim budgetary certainty over a long period at a very low rate." Lea Karasavvas at the firm said: "The demand for fixed money, particularly over the long term, has definitely increased over the last few months. We are finding that our clients are fearful of rate increases and are looking to lock in over the longer term to benefit from the historically low rates on offer at present."
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