25-Year mortgages aimed for ‘the norm’
The majority of fixed rate mortgages are currently only held for up to five years. But if Chancellor Alistair Darling gets his wish, fixed rate mortgages may settle in at the 25-year mark, becoming the norm in future lending.
According to Chancellor Darling, the impact of 25-year fixed mortgages would give homeowners more security- which he asserts has been lacking across the current uncertain financial landscape.Currently, Nationwide is the only major UK lender offering a 25-year, fixed rate mortgage. However, Mr. Darling also added that he wants to see “greater availability of affordable, long term fixed rates.” And that, “for many households, particularly those on low incomes, fixing the level of mortgage repayments for several years makes real sense. It can also contribute to wider macroeconomic stability.”
Supporting Alistair Darling’s views on fixed rate mortgages, the building society has recently announced its partisan outlook of the same sentiments. The society announced that the 25-year fixed rate mortgage was sold out in just five weeks when it launched in March of last year.
Maintaining a balance in lending practices to offer a variety of financial products to consumers in all walks of life, may in the end, prove key to long-term lending trends.