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Daily Telegraph article on 30 year fixes

ended 21. November 2021

A journalist at the Daily Telegraph is writing an article today about Kensington Mortgages launching 25 and 30-year fixed rate mortgages. She is after a few quick comments about why these types of offers might be coming to market now and whether it is unusual. Is this the first? The rate will be less than 3pc, so how does that compare to others? Is this actually a good deal for people when shorter terms are so much lower? Will other lenders follow suit? Any other observations, jot them down!

3 responses from the Newspage community

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Rob Peters
Principal at Simple Fast Mortgage
Long-term fixed rates are nothing new, but products released to date have underwhelmed as they only suited only a very a limited number of borrowers. This is primarily because of the lack of flexibility should the borrower's circumstances change during the fixed rate period; any changes often incurring a big fee. Kensington have indicated their new product will offer flexibility for borrowers looking to move or sell their home, and this could be a winning ticket for them, making it a viable option to a wider audience.
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Dean Esnard
Director at Magni Finance
If you have lived in France, Germany or the US, you will be used to seeing fixed rates up to 25 or 30 years. But this will be new to UK borrowers. With the base rate looking like it could increase imminently, long term fixed rates are very appealing. 7 - 10 year fixed rates however have been around for a few years and they are still unpopular as the majority of people don’t want to be tied into a product for this long. Fixing for longer will normally involve paying higher arrangement fees and expensive early repayment charges if you exit the deal early so this will need to be factored in when deciding on which product is most appropriate.
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Jamie Thompson
Mortgage Broker at Jamie Thompson Mortgages
Borrows need to keep in mind any tie ins that come with such products. It's uncommon for somebody to stay in the same home for 25-30 years these days and anyone considering this type of product needs to understand the implications if their circumstances change. A first time buyer should think twice about such a product. As with any financial product there will be a few people this this suits perfectly though. Just keep in mind they might be paying 3 times as much interest as they could have done even on a 5 year fix deal today. This could wipe out any savings made in the future when rates might be higher but they could be paying it on a much much lower balance having cleared more capital and payed less interest in the early years. I've seen the pickle people have got themselves into by fixing for 5-10 years, let along 30.