Nationwide reintroduce 25 year fixed rate mortgage
A recent pledge by the Chancellor of the Exchequer to encourage the provision of long-term fixed-rate mortgages has been responded to by Nationwide in the shape of a relaunch of its 25-year fixed-rate mortgage.
With the reintroduction of this mortgage product, Nationwide are aiming to provide stability and flexibility for borrowers. Individuals who take up the 25 year fixed rate mortgage will be able to benefit from a 6.39% interest rate for the full term of the mortgage.
The government is keen to see the current trend of homebuyers taking out short-term fixed-rate mortgages replaced with long-term fixed-rate agreements as it believes this will aid the stabilisation of the UK housing market.
Debt advisers are concerned that short-term fixed-rate mortgages, which account for a substantial proportion of mortgage borrowing, will soon incur costs for homeowners as a large number of them were taken out when interest rates were low. With five base rate rises since last August, the fear is that costs could be more than some people can afford.
While taking out a 25 year fixed-rate mortgages can prove to be almost as expensive a venture, especially as the UK is near the top of the interest rate cycle, Nationwide are confident that consumers are want their relaunched fixed mortgage.
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