10-year mortgage deals 'drying up'

17/08/2009

Mortgage customers are facing a tough time in taking out a fixed-rate loan, it has been revealed.

MoneyExpert.com said that the number of products offering to keep rates the same for ten years or more currently available is just 39, down from 137 in summer 2008.

Commenting on the figures, Andrew Hagger at financial website Moneynet.co.uk pointed out that customer demand could have fallen for these loans, resulting in the decline of availability.

The credit crunch, which has made it harder for banks to raise revenues on the markets, might also have contributed to the trend.

Mr Hagger also said that interest rates attached to ten-year fixes tended to be higher than their two- or five-year equivalents.

"Basically a fixed-rate is good for anybody who has got a fairly tight budget and wants to manage their payments and make sure they stay the same," he commented.

"[The average ten year deal] is fairly high to be honest. The trouble is that people see rates over lower terms and think: 'I do want to lock in, but I don't want to lock in at such a high rate'."

Mortgage broker John Charcol said recently that 83 per cent of clients take out a fixed, rather than variable, mortgage.

Tags; Housing Debt and Bills, Young Family Finances,

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