The Chancellor of the Exchequer, Alistair Darling, is encouraging lenders to offer more longer term mortgages with fixed rates at affordable rates. Darling wants to see more twenty five year fixed rate deals on the market, stating that these mortgages would increase stability and affordability for homeowners and borrowers.
Over recent months many homeowners have suffered difficulties in keeping up with mortgage repayments due to rising living and interest costs. The level of repossessions has gone up by over 20% over the past year. Darling said that he wanted to see ‘greater availability of affordable long-term fixed-rate mortgages’.
Darling plans to discuss this issue at his up and coming first budget, and plans to encourage lenders to offer these longer term fixed rate deals. He said: ‘For many households, particularly those on low incomes, fixing the level of mortgage repayments for several years makes real sense. It can also contribute to wider macroeconomic stability.’
In the past some lenders have introduced longer term fixed rates for ten or twenty five year periods, but so far these have no proven overly popular. The majority of consumers that opt for fixed rate mortgages tend to go for shorter terms of two, three, or five years.
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