Long Term Fixed Interest Rate Mortgage

The mortgage market has seen some changes since the 2008 credit crunch, long term security has become a priority. Mortgage lenders are being asked by the current government to promote long term fixed rate mortgages. These loans, with fixed-rate terms of 20 - 25 years or even more. It wont be long now before fixed interest packages become the most popular in the UK

This is is stark contrast to the figures in 2006 which illustrate how things change in the long term.

"The UK property market is at last beginning to show signs of growth and at a rate faster than any seen in the last 18 months. In January 2006 growth in property value was 1.4% compared to an increase of just 0.5% in the previous month. Not since July 2004 have such high growth rates been seen."

This has prompted an increase in consumer confidence and a subsequent increase in the number of buyers.

The good news for buyers is that long term fixed rate mortgages can be found often with rates as low as 4.5% for the next few years. While this may not sound particularly low or long term the predictions are that rates will continue to fall and the length of the fixed term is expected to increase.

Lenders are also aware that just over two years ago a large proportion of UK borrowers purchased mortgages at incredibly low fixed rates in some cases as low as 3.89%. Lenders know these customers are up for renewal and are doing their best to attract them back. So this coupled with the prediction of a market upturn may mean that we could expect to see some attractive fixed rate long term mortgage deals on the market.

Fixed Rate Mortgages advantages:

• You know what your payments will be in the long term from month to month
• The monthly interest payment is fixed over the life of the term of the mortgage (No matter how high market interest rates go up).
• Fixed rate also means protection from interest rates rises
• Depending on your financial goals, you can schedule to pay off your home loan or mortgage between 10 and 30 years.

Fixed Rate Mortgages disadvantages:

• With a Fixed Rate Mortgage you will be tied into your set higher interest rate even when rates are low until the end of the agreement.
• You won’t see any decrease in your monthly repayments.

At the end of the term borrowers usually convert to the a standard variable rate mortgage.

Fixed-Rate Mortgage is it for you:

• Do you prefer regular payments?
• Do you live by a strict budget or are on limited or fixed incomes?
• Plan to stay in your property for a while?

If you apply for a mortgage or remortgage do it when interest rates are low.

Some typical long term rates below:-

• Abbey - Fixed 4.28%
  until - 02/09/11 4.24% 4.50% 75% Arrangement: £995 Early repayment: 3% of outstanding balance until 02/09/11 plus repay benefits until 02/06/11
• Abbey - Fixed 4.39%
  until - 02/09/11 4.24% 4.40% 75% Arrangement: £995 Early repayment: 3% of outstanding balance until 02/09/11