Chancellor’s announcement on long term fixed rate mortgages

Yorkshire Building Society welcomes the Chancellor of the Exchequer’s announcement that he is seeking to boost the supply of longer term fixed rate mortgages.

Iain Cornish, Chief Executive of the Yorkshire said, “The issue up to now is that there has been little demand for terms as long as 25 years but there are signs that the British public are weaning themselves off the need to change lender every two or three years. Sales of five and 10 year fixed rates have increased dramatically over the last 12 months but the primary problem with terms longer than 10 years has been the level of early redemption charge that has to be applied to make the products economically viable.

“One or two lenders have tried to offer ‘escape’ windows at 5 and 10 years from a 25 - year product but the take-up has been sporadic.

“We are currently working on a new proposal which will radically change the consumer’s view of longer term products and we expect to be in a position to make an announcement in the next few weeks.”