Lenders no longer offering long-term fixed-rate mortgages
New research by financial advice website Moneyfacts has shown that there are no mortgages available today which are long-term and fixed-rate.
In January 2008, eight lenders including Halifax and Nationwide were offering 25-year fixed-rate mortgages, while this figure dropped to just three - Manchester and Scarborough building societies along with the Co-operative Bank - by the same time in 2009.
According to the research, today even these three have stopped providing long-term deals, with the only 15-year fixed-rate mortgage on offer from Britannia Building Society.
But, as Darren Cook, spokesperson for Moneyfacts, commented: "With rates starting at 6.49 per cent, [deals like] these are likely to be unattractive to many borrowers."
He continued: "Only nine lenders are offering ten-year deals, with the majority of the market offering deals of no longer than five years. Long-term deals may be unappealing to borrowers, particularly in an unsettled economic environment."
However, prime minister Gordon Brown said in July 2007 that lenders should be looking to increase the amount of long-term fixed-rate mortgages they are offering to help reduce the volatility of the housing market.
Short-term mortgages are proving more popular with consumers because they give them the opportunity to switch to a better deal if the market suddenly changes, which it is likely to do in the current economic climate, Mr Cook said.
Moneyfacts previously carried out research which said that homeowners looking for a cheap mortgage are finding that the best deals are being taken off the market before they can properly research them.
The report claimed that lenders are withdrawing home mortgages with good rates within days of announcing them due to the unpredictability of the market.
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