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News
Long Term Fixed Rate Mortgages
Lenders are having problems making long-term fixed rates attractive to customers although there is a market for them.
It is thought people would be more willing to take out a long-term mortgage if it were easier to get out of and/or at a lower cost.
42% of customers chose fixed rate mortgages of up to five years. This rate is the majority option.
Although 43% would prefer longer term fixed rate products: this suggests a minority for these deals.
Factors putting people off long-term deals were that they were not flexible enough, the fact they were either unable to get out of the deal or the high cost of doing so. Another factor was high interest rates.
Around 50% of customers would be willing to pay up to 10% extra per month to be able to have the opportunity to re-mortgage at any time without incurring further costs.
It is thought that long-term fixed rates will have only a small following for the foreseeable future with a possible move from short to medium term rates.
Some consultants feel it may be wrong to make long-term rates very attractive as it may encourage customers to use a product that is not the best deal for them.
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