Paul Hearnden, managing director of My Mortgage Direct, said an increasing number of lenders were launching long-term mortgages as the Base Rate has risen, which was prompting borrowers to focus more on them than usual in the worry that rates will rise further.
He said: “Lenders tend to publicise their long-term mortgages when rates go up, but go quiet when rates go down. They play to the audience. Lenders are not going to fix rates at a level where they will lose money for a long time, meaning they are fairly confident the rate is not going to be exceeded. If it is your last property and you are in steady employment, it might be a good idea. But it’s not for first-time buyers who are more panicky about rate changes, as the lock-ins are very harsh.”
However, Richard Barker, product manager for Norwich & Peterborough Building Society, said it did not give any extra emphasis to longer-term deals. He said: “The yield curve is slightly inverted at the moment, meaning long-term rates are sometimes lower than at the short end, so they look more attractive. It’s more down to the money market than mortgage lenders actively pushing that type of product.”
Mark Chilton, managing director for Purely Mortgages, commented: “There is a growing swell of opinion that pressure is coming off further Base Rate increases, so the pressure is moving away from fixed rate mortgages.”
