Over half of borrowers 'not interested in long-term fix'

Some 54 per cent of British mortgage borrowers would not take out a mortgage with a rate fixed for 25 years, according to research by Abbey.

The mortgage lender's survey of over 1,000 Britons found that 23 per cent of people would not be sure about taking out a long-term fixed-rate deal and another 23 per cent would consider one.

Of the people who said they would not be interested in a long-term deal, 27 per cent said they would not want to be locked into one mortgage for a sustained period of time.

Another 27 per cent said the uncertainty of the future would discourage them from fixing their interest rate for 25 years and 18 per cent said the chance of interest rates falling would make a shorter deal preferable.

The majority (86 per cent) of people who would consider a long-term fixed-rate said the security of knowing the up-front costs of their mortgage would be a persuasive factor.

Sue Hayes, director of Abbey Mortgages, said: "It is clear that the public don't have much of an appetite for 25-year mortgages. This is borne out by Abbey's own experience – we have launched 25-year mortgage products in the past – all of which had limited demand.

"We continue to see increasingly strong demand for our five and ten-year fixed deals, indicating that 25 years is just a step too far. Given the great cultural and economic changes we've seen in the past 25 years, this is not surprising. Few people are prepared to commit themselves to a deal for a quarter of a century."

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