Nationwide launches new 25 year fixed rate mortgage

Nationwide Building Society has announced the reintroduction of its innovative 25 year fixed rate mortgage at a rate of 6.39%. The new 25 year fixed rate will be available from Tuesday 17 July.

The 25 year fixed rate was first launched by Nationwide in March 2007 and sold out in five weeks. The product not only offers good value and the security of fixed payments but also provides flexibility - there are no early repayment charges after the first 10 years and it is fully portable - making it an attractive option for first time buyers or borrowers moving home who still have a term of at least 25 years.

Features of the 25 year fixed rate mortgage include:

Rate from 6.39%

No Early Repayment Charges after the first 10 years (3% during first 10 years)

Flexibility: the ability to overpay (by up to £500 per month), underpay and take payment holidays

Portability: as with all Nationwide mortgages, borrowers can take it with them when they move home and top it up with an additional loan if they wishto move to a larger property

Saving on fees: with only one arrangement fee, borrowers could save hundreds and in some cases, thousands of pounds on fees, over the term of their mortgage

Security: protect against potential interest rate rises with fixed payments

Simplicity: no need to choose and arrange a new deal every few years

Reservation fee of £599 (£100 discount for existing borrowers)

Available to both home movers and remortgagors

No higher lending charge on any Nationwide mortgages

Stuart Bernau, Nationwide’s executive director, said: “The Chancellor has recently expressed concern that most lenders do not offer long-term fixed rates. Our experience is that the 25-year fixed rate has a place in the market and offers long-term stability and flexibility for borrowers who want to protect against fluctuations in interest rates.

“People who want a mortgage for life don’t necessarily want a house for life which is why our mortgage is fully portable, allowing borrowers to take it with them as they move up the property ladder. The relaunch of this product follows a very successful uptake earlier in the year and will allow even more borrowers to benefit from the advantages it offers.”