| Consumers thinking about signing up to a | | | | switching providers every couple of years could |
| long-term fixed-rate mortgage deal should | | | | add on an extra £9,600 to your mortgage |
| consider the product carefully, an industry expert | | | | in fees alone. You will also avoid having to pay |
| has advised. | | | | exit fees, valuation and legal costs and it takes |
| Moneyfacts analyst Lisa Taylor suggested that | | | | out the hassle factor of continually switching |
| such proposals to offer such long-term products | | | | lenders," she claimed. |
| could help borrowers to maintain the level of their | | | | Ms Taylor added that although the base rate is |
| secured loan payments. However, she added that | | | | "still quite low", changing economic cycles and a |
| if the Bank of England's monetary policy | | | | shift in government policy means that "a lot can |
| committee (MPC) decides to lower the base rate | | | | happen in 25 or 30 years". Meanwhile, she claimed |
| of interest in the long-run then homeowners could | | | | that those who supply long-term products "don't |
| be trapped with unnecessarily high mortgage | | | | easily cope with lifestyle changes". The |
| costs. | | | | Moneyfacts analyst also claimed that if borrowers |
| Ms Taylor said: "Signing up to a long-term | | | | want to move home or opt out of the deal than |
| fixed-rate deal does offer peace of mind that | | | | they may be hit with high cancellation charges. |
| your repayments will not increase over your | | | | Her comments come after Alistair Darling, the |
| given deal period. But it is also in effect a | | | | new chancellor of the exchequer, recently |
| long-term gamble on rates. While you may feel | | | | announced that Labour is set to roll out proposals |
| smug as rates rise, if they drop you may be | | | | to increase the availability of long-term fixed-rate |
| kicking yourself, especially if this persists over a | | | | loan deals to help potential first-time buyers take |
| long period of time." | | | | their first steps on the property ladder. "This |
| The analyst also reported that by opting for such | | | | seems to be a rather sweeping solution to solve |
| a secured loan product borrowers can help reduce | | | | the massive affordability crisis," she suggested. |
| the amount of money spent on fees associated | | | | The products were also stated to still make up |
| with the house buying process. "Assuming today's | | | | for a minority of mortgage deals currently on the |
| average arrangement fee of £800, | | | | market. |