Only 23 per cent of those questioned by the lender would even consider fixing for that amount of time, with 54 per cent dismissing it outright.
Of those who would not consider it, uncertainty over the future – 27 per cent, being locked in for that amount of time – 27 per cent, and a belief that interest rates would fall –18 per cent, were the overriding factors, while around 25 per cent wanted to pay their mortgage off inside 25 years.
Sue Hayes, director of Abbey Mortgages, said: “It is clear that the public don’t have much of an appetite for 25-year mortgages. We continue to see increasingly strong demand for our five and 10-year fixed deals, indicating that 25 years is a step too far. Given the cultural and economic changes we’ve seen in the past 25 years, this is unsurprising.”
Meanwhile, further research from Abbey found that the average loan taken out by a first-time buyer (FTB) has nearly doubled inside four years.
The average FTB now has a £130,000 mortgage, while nearly half are not even paying it off yet, with 44 per cent on interest only deals.
Darren Pescod, managing director of The Mortgage Broker Ltd, said: “I’m surprised it’s only half as people don’t like being tied in for long periods. Unless there is a 25-year product out there with great incentives, it won’t be popular. I know people are worried about interest only, but if it is sold properly and the client understands what they are getting into, it shouldn’t be a problem.”
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