More lenders are offering long-term fixed-rate mortgages
Published On 26 March 2008
More and more lenders are offering long-term fixed-rate mortgages, a new study has shown.Data released by MoneyExpert.com showed that there are now 132 individual fixed-rate mortgage products on the market with terms of ten years or longer. It added that these deals now account for around 11.5 per cent of all fixed-rate deals.
The company pointed out that the average interest rate on these fixed-rate mortgages has increased from 5.89 per cent to 6.14 per cent in the last year.
"Long-term fixed-rate mortgages are here to stay … However, even though there is now more choice for homeowners, that choice also comes at a higher cost," explained Sean Gardner of MoneyExpert.com.
"Average rates on long term deals are up, meaning the consequences of making such a big decision are even more severe. If interest rates start to spiral, you’ll be laughing. But if they continue to drop then you could have saved money sticking to shorter term arrangements."
Recently, the Council of Mortgage Lenders suggested that interest-only mortgages could be a good option for some people, as long as "the borrower is fully aware of the consequences and reappraises the need to put in place a plan for the repayment of the capital over the course of the loan".
