Private Finance comments on the Conservatives’ Pledge for 25-Year Fixed-Rate Mortgages

Simon Checkley, Managing Director at Private Finance, comments on the Conservatives’ Pledge for 25-Year Fixed-Rate Mortgages.

“As rates have fallen close to record lows, Private Finance has consistently been an advocate of long-term fixed mortgages. We continue to urge borrowers consider some of the very attractive longer-term fixed-rate deals and safeguard against future rate rises, which will be inevitable at some point in the coming years.

“The prospect of a 25-year commitment might seem daunting to those taking out their first ever mortgage, however the long-term security and value this could present for first-time buyers should not be overlooked. In order for this policy to be successful however, government and lenders need to ensure that these products are not just ‘lifetime’ in terms of rates, but also in suitability.

“Flexibility will be key in determining the success and effectiveness of these proposed products. Features will need to be built into these mortgages that will enable first-time buyers to graduate from their first homes and progress up the ladder. That means the ability to port these products, take out additional borrowing, overpay to minimise the loan-to-value over time, and avoid significant early repayments charges should borrowers want to exit their term before the 25 years are up.”


Kindly shared by Private Finance