Minister calls for 30-year mortgages
Homeowners should be offered longer term mortgages, according to housing minister Grant Shapps.
Speaking at the Building Societies annual seminar, Mr Shapps is quoted as saying: “In today’s uncertain world, people want to know where they stand. Yet when it comes to buying a home, there are no mortgages available where they can fix their payments for a long time - the longest fixed rate for many is five-years.
“Longer term mortgages – possibly as long as 30 years – could help families on tight budgets know exactly where they stand when they’re buying a home, by giving them greater certainty over how much they will be paying for their home in years to come.â€
Aaron Strutt, a broker at Trinity Financial, says: "You would have to be very brave to take a 30-year fixed rate mortgage.
"Borrowers have to prove their income when they port their mortgage and the banks' lending criteria constantly changes. If you were on a long term fix and you wanted to move home or borrow more, there is real chance an application would be refused a number of times over 30-years. You could be stuck in your home.
"Some lenders offer ten-year fixes and I think that this is a more sensible duration if you want a longer term mortgage."
20 October 2011