Chris talks about US long term mortgages vs UK shorter term mortgages in The i Paper
This weekend one of our co-founders Chris Sykes spoke about long term fixed rates in The i Paper.
As volatility seems to be the norm these days they would insulate borrowers against it. However, in the current environment where many are thinking this is a short term blip in rates, it would take a more stable environment for greater mass market appeal.
Chris is quoted in the paper:
“The flaw of these long terms rates is the premium charged on them. Often this premium is 1 per cent over a two or five-year fixed rates on the market, on a £350,000 mortgage that is £3,500 per year, or around £291 per month.
That is a hard pill to swallow for many when they are having to stretch themselves just to get on the ladder.”
Sykes says there is a place in the market for these products, and he has some customers on them.
“Clients who took these back when the rate you could achieve on them was 2 or 3 per cent are now laughing. I just can’t see them being wildly popular until we are in a stable lower rate environment, or they came down in price,” he says.