Long-term fixed-rate mortgages 'could become more popular if they were cheaper'
Published On 16 February 2008
Industry experts have predicted that consumers will increasingly opt for longer-term fixed-rate mortgages as long as the exit costs on such deals are not prohibitively expensive.A spokesperson from the Council of Mortgage Lenders (CML) said that people might like the idea of long-term fixed mortgages because they allow them to carefully budget and reduce the uncertainty associated with borrowing large sums of money.
The comments come after chancellor Alistair Darling called for more longer-term mortgage deals in the UK.
In particular, the CML spokesperson said such mortgages offer "peace of mind if rates go up".
However, she added: "There is a reasonable consumer appetite for long-term fixed rate mortgages, if consumers are able to exit them more easily and at lower cost.
"Those are our own concerns when it comes to long-term fixed rates. We conclude that unless there is a major policy intervention from the government then take-up is going to be low.
"[They won't become popular] unless they are priced appropriately. I think that it's cost-prohibitive, in a way."
Recent research from Abbey Mortgages showed that over ten million people in the country would opt to fix their mortgage deal if they could.
