Borrowers 'should take advice on long-term fixed rate'
Oct 31, 2006
Borrowers have been advised to consider carefully and take independent advice before choosing a long-term fixed rate mortgage.
Although less than 20 per cent of providers offer fixed rate mortgages greater than ten years, the last few weeks have seen a large number of new longer-term products entering the market, many offering some very competitive deals, according to moneyfacts.co.uk.
We've already reported that more and more borrowers were choosing fixed rate mortgages for a longer period due to uncertainty about the economy. However, borrowers should consider the commitment carefully and take independent advice as there are pros and cons to the mortgages, moneyfacts.co.uk advised. Fixing a rate over a long period of time can be considered a gamble as a lot can happen within the economy and within a household over this time, Moneyfacts said.
On the other hand, long-term fixed rate borrowers are likely to pay less fees than with short-term deals, plus many long-term deals offer flexible features such as payment holidays, as well as similar interest rates to shorter term deals. The additional longer-term mortgages are likely to be welcomed by consumers looking for long-term security with the peace of mind that mortgage payments will stay at a level they can afford.
We found a deal from the Woolwich that was fixed until January 2017 and with fees for remortgaging increasing recently, choosing a long term mortgage deal can seem very attractive.
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