The rate is 5.74 per cent, which will remain fixed for 15 years. Abbey supports the view that long-term fixed rate mortgages give people more choice. It believes this new rate will appeal to people seeking the reassurance of knowing exactly what their mortgage payments will be over the long term, regardless of any changes to the Bank of England base rate1.
The 15 year fixed-rate mortgage is fully portable, which means that customers who move home during the 15 year period can take it with them, without penalty, and top up with another deal if they need to borrow more.
This is the second initiative Abbey has undertaken in recent months to support longer-term mortgages. In December 2003, Abbey introduced a 'guaranteed deal for life' mortgage, where, in return for an upfront fee, which Abbey has just reduced from £1,000 to £500, customers pay just 0.50% above the Bank of England base rate for the life of the mortgage. There are no penalties for early repayment.
Angus Porter, Abbey's Customer Director said: "The issue of long-term fixed rate mortgages has been prominent recently following the Miles review. Although there has been a limited appetite for these mortgages so far, recent increases in the Bank of England base rate and predictions of more rises to come this year mean that more people are looking for longer-term security, making the prospect of such mortgages more attractive.
"Customer retention is important to us, and to achieve that we have to offer a variety of competitively priced mortgages. Customers value choice and, in particular, many of them value the choice of shorter-term deals. We're committed to helping people make the right decision when choosing a mortgage to suit their needs whether it’s over a short or long term."
