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Monday 30th July 2007
Fewer than one in four people would consider taking out a 25-year mortgage, according to new research by Abbey.
The research showed that Brits are not keen on the government's new initiative to try to convince borrowers to take out long-term fixed mortgages, as 54 per cent of those questioned said they would not take out a 25-year fixed-rate mortgage with only 23 per cent saying they would consider one.
The chancellor, Alistair Darling, said more 25-year fixed-rate mortgages should be offered as an antidote to rising prices and interest rates.
The reluctance to commit to a 25-year mortgage was down to a variety of reasons - 27 per cent said it was too long a period, another 27 per cent claimed that the uncertainty of the future would put them off, 18 per cent were predicting that interest rates would fall in time and around a quarter of people were planning to pay off their mortgage within 25 years.
Sue Hayes, director of Abbey Mortgages, commented on the findings: "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."
She added: "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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