Long-term mortgages 'are increasingly attractive'
27th Jan 2012
UK property owners are increasingly being attracted to long-term mortgages, according to one sector expert.
Ben Wilkie, editor at What Mortgage, made the comments after the Norwich and Peterborough Building Society launched a new ten-year fixed-rate mortgage, which is the lowest ever on the market.
The new mortgage product is available at a best buy rate of 3.99 per cent up to 75 per cent loan-to-value with a fee of £295, with borrowers receiving a free valuation and free legal fees for re-mortgages or a £200 cashback option for purchase customers.
Mr Wilkie said that the deal is likely to become popular with many people in the UK.
He noted that over the past couple of years short-term fixed-rates have become less popular, because home buyers take the gamble that when interest rates rise, they will be better off.
"Because everyone thinks that the Bank of England base rate is going to be so low for such a long time, it is not really worth taking a short-term fix, so the longer-term ones are more attractive," Mr Wilkie explained.
He added that for people who want a fixed deal, it is not really about paying the highest amount, but having security and understanding that their payments will stay the same and that they do not have to worry about it over the coming years.
The expert predicted that now that one lender has launched something, there are a bunch of other ones all going to suit - especially if the product gets a lot of attention.
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