Nationwide cancels 25-year fixed-rate mortgage
Published On 3 May 2007
With more interest rate increases expected in the near future, consumers have snapped up long-term fixed-rate mortgage deals, according to a new report.At the beginning of March, Nationwide Building Society launched a 25-year fixed-rate mortgage that allowed customers to change deals after ten years without penalty.
However, the deal has proved so popular with home buyers looking for long-term security that the original tranche of £50 million of funding has already been used up. As a result, the lender will withdraw the product on May 3rd.
"The new 25-year fixed-rate mortgage has proved to be very popular amongst borrowers," explained Matthew Carter, Nationwide's divisional director for mortgages.
"We hope to be able to re-launch the product soon, providing we are able to secure a competitive rate on the money markets.
"Nationwide remains committed to offering long-term good value to its members and we are pleased our borrowers have been able to realise the benefits of mutuality as a result of this product."
Several consumer websites praised Nationwide when it introduced the long-term fixed-rate mortgage.
"Due to recent rises in interest rates it seems that the Nationwide is reacting to a greater demand for longer term fixed rates. A fixed rate can give borrowers additional peace of mind at a time when some experts are predicting another rise," explained Julia Harris, a mortgage analyst at moneyfacts.co.uk in March.
