Minister calls for 30-year mortgages

by Aaron Strutt

Oct 20 2011

Homeowners should be offered longer term mortgages, according to housing minister Grant Shapps.

Speaking at the Building Societies annual seminar, Mr Shapps is quoted as saying: “In today’s uncertain world, people want to know where they stand. Yet when it comes to buying a home, there are no mortgages available where they can fix their payments for a long time - the longest fixed rate for many is five-years.

“Longer term mortgages – possibly as long as 30 years – could help families on tight budgets know exactly where they stand when they’re buying a home, by giving them greater certainty over how much they will be paying for their home in years to come.”

Aaron Strutt, a broker at Trinity Financial, says: "You would have to be very brave to take a 30-year fixed rate mortgage.

"Borrowers have to prove their income when they port their mortgage and the banks' lending criteria constantly changes. If you were on a long term fix and you wanted to move home or borrow more, there is real chance an application would be refused a number of times over 30-years. You could be stuck in your home.

"Some lenders offer ten-year fixes and I think that this is a more sensible duration if you want a longer term mortgage."

20 October 2011