Demand for increased term fixed rate home loan products is rife across the UK, with almost 10% of borrowers stating that they would gladly commit to longer duration loans if they had the chance.
Catalysed by a number of recent base rate peaks and troughs, British homeowners are calling for longer term home loan facilities, as a means to provide stability to their financial arrangements. It is suggested that almost 39% of all homeowners within the UK, are currently tied to a variable rate product, of which approximately 22% are expected to struggle with the management of their repayments in the coming months.
Fixed rate products provide borrowers with a certain sense of reliability, for the simple reason that their rate is not tied into the national base rate, and therefore does not fluctuate throughout the course of the plan. However, homeowners who do opt for this form of mortgage are only privy to a fixed rate for a relatively short period of time (usually 2 years), after which time a variable rate plan is then taken up.
Reportedly, as a way for borrowers to protect themselves from drastically fluctuating rates, and the possibility of repossession, more people than ever are calling for providers to offer over extended fixed rate products.
Commenting on the findings, a spokesperson for one of the UK’s best-known debt charities stated that home loans repayments are central to most people’s financial planning/health. If times are tough, smaller, less meaningful commitments often take a back seat to the repayment of a home loan, and for this reason, consumers are demanding more from their providers, and indeed the mortgage industry as a whole.
