Equipment Leasing

A recent report has shown that consumers have very little choice when it comes to finding a long term fixed rate mortgage for twenty five years, with only seven out of ninety lenders offering a fixed rate deal for such a long term.

Despite calls from Chancellor of the Exchequer, Alistair Darling, for lenders to offer greater access to affordable longer term fixed rate deals – an issue he will be addressing in his up and coming first budget – many lenders are still not offering this, with many stating that consumers are never keen to take up a fixed rate for such a long period.

Fixed rate mortgages have been very popular in the past, but most consumers feel more comfortable taking them over two, three, or five years.

One industry official stated: "Certainty about monthly remortgage payments may be a good thing but borrowers should think very carefully before committing to 25-year fixed rates. The risks are clear. Not only could borrowers end up locked at a higher rate when interest rates are falling but could also find themselves having to pay redemption penalties if they want to move house."

He added: "It is virtually certain that people’s circumstances will change several times over a 25-year period."