Mortgage innovation update.. Lender launches fixed rate mortgages for up to 40 years!
Pebble Financial is pleased to explain to you some recent innovation to the UK mortgage sector.
At what has been a very turbulent time over the last couple of weeks in the mortgage market, this week sees the launch of a range of long term fixed rate options. This ‘Flexi Fixed for Term’ range allows borrowers to fix the rate on their mortgage for the full term of the loan which can be anywhere from 11 to 40 years.
Our opinion based on recent discussions with clients suggests that given current market conditions many would consider a longer term fixed rate. This innovative range of products fills what has been a void in the UK mortgage market until now.
The rates available depend on the duration and repayment term of the proposed mortgage, for example a repayment term of 20 years would provide a fixed rate for this full 20 years. The interest rates are tiered and depend on the repayment term of the loan. These deals are currently available at up to 85% loan to value for purchasers and 85% loan to value for remortgage borrowers.
What is also a major benefit to the way these mortgages work is that the affordability calculations (which determine the maximum loan amount available to a borrower), is based on the actual fixed rate and not on a higher standard variable rate stress test.