Are long term fixed rates the future?

Are long term fixed rates the future?

With the uncertainty of potential increase rate increases following Brexit and Covid, lots of homeowners are looking to fix their interest rates over the longer term.

Recent research from Kensington Mortgages reveals that 83% of homeowners and renters would consider a long-term fixed-rate mortgage.

Kensington Mortgages is launching its first long-term fixed-rate mortgages today, allowing borrowers to freeze their monthly payments for between 11 and 40 years.

Kensington Mortgages chief executive Mark Arnold says:

“A fixed for term mortgage – already very popular in some parts of continental Europe – is likely to become increasingly attractive in a rate rising environment.

“Whether you’re a first-time buyer or homeowner wanting an affordability boost, a self-employed worker worried about remortgaging, or someone wanting greater certainty on monthly repayments – the new Flexi Fixed for Term can offer a new potential solution for you.

“With one fixed monthly payment until the mortgage ends, extra borrowing power, and added flexibility for any life events that may happen, it is that simple.

The way the new Flexi Fixed Mortgage works is:

Affordability is based on the fixed interest rate, not on a higher Standard Variable Rate (SVR) stress rate. The lenders SVR is the rate in which you revert to when an initial deal period ends, (usually a much higher interest rate) which means that many applicants may be able to borrow more than they would on a standard mortgage.

The monthly mortgage payment stays the same throughout the entire term of the mortgage, with No early repayment charges applicable if moving home, selling, or a critical illness or death occurs. 

Overpayments are allowed up to 10% of the original balance per year.

If a client would like to borrow more money, they can apply for a further advance, with the option available after 12 months subject to affordability.

Kensington’s ‘Flexi Fixed for Term’ deals are portable so long as the new property meets the lender’s criteria.

The products come with free legal conveyancing and no product fees. 

Gifted deposits are permitted so long as they meet the eligibility criteria set out by the lender. 

This is a new innovative mortgage product, and The Mortgage Girl encourages the government’s ambition to make new types of mortgage products available which are purposefully designed to help increase homeownership while providing long-term security.

Kensington has created a product that sounds like it will do just that.

If you are looking to buy your first home and would like to know more about a long-term fixed interest rate mortgage, or perhaps you are due to remortgage and would like this to be the last time you do so, please contact The Mortgage Girl Team on 01752 749656

If you liked this post Are long term fixed rates the future? and looking for more great mortgage tips, news & advice, check out our last blog post 95% Mortgages Are Back!

Call 01752 749655 or CONTACT US for free impartial mortgage advice to help you find the best deal.