Borrowers not attracted to long-term mortgages


Tue 31st Jul, 17:07:05 BST

Despite the security of knowing up-front costs, just a quarter of Britons would consider taking out a 25-year mortgage, research has found.

In a survey of 1,000 homeowners and prospective homeowners undertaken by Abbey Mortgages, 54 per cent claimed that they would definitely not take out a 25-year fixed rate mortgage, while only 23 per cent would do so.

In addition, 23 per cent of those questioned were unsure.

Of those people who claimed not to be attracted to the long-term packages, 27 per cent said they were unwilling to commit themselves for such a long time and 18 per cent stated that they would be wary of missing out on a better deal in the future as they believed that interest rates could fall.

Commenting on the findings, Sue Hayes, director of Abbey Mortgages, said: "We continue to see increasingly strong demand for our five and 10 year fixed deals, indicating that 25 years is just a step too far.

"Given the great cultural and economic changes we’ve seen in the past 25 years, this is not surprising.

"Few people are prepared to commit themselves to a deal for a quarter of a century."

The latest figures from the Bank of England show that £31.9 billion worth of mortgage approvals were granted during June, with lending having increased at its fastest pace for three months.

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