Back in 2007, at the height of the property market, the Nationwide introduced a 25 year fixed rate mortgage, designed to give home owners the long term stability of fixed interest rates. First time buyers and those looking to secure their payments were persuaded to take on lengthy mortgages with hefty get-out clauses and were soon found out of pocket during the market crash.
Yesterday Grant Shapps called for lenders to increase their mortgage periods to offer stability for home owners.
“Longer-term mortgages – possibly as long as 30 years – could help families on tight budgets know exactly where they stand when they are buying a home, by giving them greater certainty over how much they will be paying for their home in years to come.”
Media resistance has so far been strong, with many suggesting such lengthy mortgages exploit increasingly desperate home owners. With such commitments many may find themselves facing enormous termination penalties and be faced with staying in houses that don’t reflect their current circumstances.
Seek unbiased assistance from regulated representative when looking for your mortgage and consider all options before committing. Talk through your future plans and plan for milestones in your mortgage to allow for lifestyle changes and varying budgets.
If you're thinking of moving house or looking for your first property, you can call Rachel on 0114 2561 560 for legal advice.