Borrowers look to the long-term

Posted: 04 Apr 2008 12:08:12 GMT

The majority of UK homeowners would like to have a long-term fixed-rate mortgage.

The majority of UK homeowners would like to have a long-term fixed-rate mortgage.

According to research from Fair Investment, 37 per cent of borrowers would like to have a deal where the rates are fixed for 25 years.

It follows Alistair Darling's first Budget, in which he said that he wanted to encourage lenders to offer more long-term fixed-rate mortgages.

"The fact that the majority of people would go for a long or medium-term fixed-rate mortgage is reflective of the country's nervousness regarding the current economy and the credit crunch," said James Caldwell, director at Fair Investment.

"At the moment, households are suffering from soaring mortgage repayments as they come off their fixed-rate deals, and some might even lose their homes because they cannot keep up with the payments.

"A long-term deal can provide people with more security by reducing the risk involved with having a mortgage, which is particularly important for families with low incomes and for first-time buyers, who often have no or little equity," he added.

The research also highlighted that 28 per cent of borrowers would like to take out a medium-term fixed-rate deal.

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