Lenders looking to offer attractive 30-year fixed-rate mortgage deals may find problems facing the marketplace at present mean such deals are unworkable.
Ray Boulger, senior technical manager at John Charcol – a UK independent mortgage adviser – has suggested it could prove impossible for providers to introduce these home loans because they are not as straightforward as they might first seem.
The industry figure was speaking in response to a speech from housing minister Grant Shapps at the Building Societies Association’s annual mortgage seminar, who encouraged lenders to bring in longer fixed-rate mortgages to ensure greater stability in the sector.
However, Mr Boulger suggested it would be difficult to come up with terms on these agreements that the majority of borrowers would find acceptable.
He stated that while “it would be good if it were feasible to give people the choice to have a long-term fixed-rate mortgage with sensible terms … there are quite a lot of things to consider”.
Lifetime trackers may therefore prove a more attractive option for homebuyers than these types of deals, due to the yield differential involved.