Abbey mortgages: 25 years is 'still too long'
www.moneynews.co.uk > Mortgages > Abbey mortgages: 25 years is 'still too long'
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Abbey mortgages: 25 years is 'still too long'
Wed 12th Mar 2008
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In response to the chancellor's suggestion that lenders develop more long-term flexible mortgages, the bank said the government needs to be "realistic" about the demand among borrowers for that type of deal.
Although more people are choosing five-year fixed-rate deals, as opposed to the previously more popular two-year deals, 25-year fixed-rate mortgages are "still very niche", according to Abbey.
It notes that people's circumstances can change dramatically over the course of a century, as can the economy, so deals which provide such long-term security are likely to only be suitable for a small number of customers.
Nationwide is currently the only major high street lender to offer a 25-year fixed-rate mortgage, which it introduced in March 2007.
Borrowers are able to opt out of the mortgage after ten years without incurring extra charges, which may be why it has proved to be particularly popular with first-time buyers.
Related News : Mortgages |
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