Lenders should consider offering longer fixed mortgages, lasting up to 30 years, housing minister Grant Shapps urged yesterday (October 20th).
The official said this could generate greater stability in the industry and, speaking at the Building Societies Association’s Annual Mortgage Seminar in London, he claimed there should be a national debate on the issue.
He noted there are no products currently available that have lifelong interest rates, while those that do have levels of five or more years tend to be restricted to people borrowing less than three-quarters of the home’s long-term value.
Mr Shapps remarked: “In today’s uncertain world, people want to know where they stand.
“Yet when it comes to buying a home, there are no mortgages available for them where they can fix their payments for a long time.”
He stated such products might not be right for everybody, but lenders should begin to consider their merits for certain customers.
In response to these calls, Building Societies Association head of mortgage policy Paul Broadhead welcomed the prospect of a debate and said the government’s aim of a more stable market is endorsed by the body.
