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Hitwise Intelligence - Robin Goad - UK

Analyst Weblog

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Surge in searches for fixed rate mortgages

August 27, 2010

The number of internet searches for fixed rate mortgages soared between April – June 2010 (Q2) compared to the same time period last year, with searches for the term ‘fixed rate mortgages 10 years’ up almost ten fold over the period. Searches for ‘fixed rate mortgages 5 years’ increased seven fold, while searches for ‘tracker mortgages’ only saw an increase of 16%, indicating that many consumers are expecting interest rates to rise over the medium term.

The table below details the annual increases in UK and US searches for portfolios of key finance / economic indicator terms.

Our analysis also reveals searches for houses for sale rose by a quarter between April – June 2009 (Q2), compared to the same time last year, and searches for properties for rent experienced a similar increase – up 22% compared to a year ago. These trends indicate strong buyer interest combined with improved affordability due to the low interest rate environment. The fact that house prices remain below pre-recession levels gives buyers a strong incentive to enter the market ahead of any possible interest rate rises.

Experian’s Insight Index also analysed searches for other personal finance products, and revealed searches for loans fell by 14% between April and June this year, compared to the same time period last year. Online searches for terms like ‘cheap loans’ and ‘low interest loans’ also saw declines of 16% and 47% respectively. The latest data released by the Bank of England confirms that the number of unsecured loans issued has fallen.

Credit cards however continued to rise in popularity, with online searches for ‘credit cards with zero interest’ up by 511% this quarter compared to this time last year. However, searches relating to credit card deals with rewards all experienced a decline in online searches, suggesting consumers are – for the time being - less focused on perks:

• Searches for ‘credit card airmiles’ fell by 24.03% between April – June 2010 compared to same time period in 2009
• Searches for ‘credit card rewards’ fell by 12.12% between April – June 2010 compared to same time period in 2009
• Searches for ‘credit card cashback’ experienced a fall of 5.02% between April – June 2010 compared to same time period in 2009

Experian’s Insight Index also highlights key differences between UK and US online searches. The US experienced a fall of 1% in searches for property for sale between April – June 2010 compared to the same period in 2009. However searches for ‘property for rent’ saw a huge increase of 104% in Q2. US consumers, like those in the UK, were less interested in searching for the term ‘mortgages’ compared to last year with a fall of 20% this quarter compared to April – June 2009.

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In Categories Economy | Experian | Financial Services | Property | Search