Long-term fixed rate mortgages risky because of life uncertainty
March 15, 2008 by admin
Filed under News, News-Mortgages
Buyers tempted to take out a long-term fixed rate mortgage after chancellor Alistair Darling indicated in this week’s budget that action might be taken in future to promote them should be on their guard. 
A number of experts have warned that the certainty that Mr Darling pointed to as the benefit of opting for a mortgage with the interest rate fixed for ten years or more is precisely what is missing.
“Uncertainty is the key deterrent,” Andrew Haggar of Moneyfacts told the Daily Telegraph, pointing to the unpredictability of life circumstances over such a long period of time.
“While borrowers can insure against unemployment and illness, people are still wary of tying themselves to a fixed rate for an extended period of time.”
Nici Audhlam-Gardiner, director of mortgages at Abbey, agreed.
“So much can happen in a quarter of a century, both to a customer’s circumstances and to the economy. While these very long term deals may be suitable to provide long-term stability for a small number of customers – they will not be suitable for all,” she said.
