Is a twenty five year fixed rate too much?

With property prices on the rise in the UK and affordability at its lowest in fifteen years, mortgage lenders have been eagerly looking into ways to try and make it easier for consumers to raise the money required for a home. Strategies such as higher income multiples and longer repayments periods, sometimes in excess of fifty years, have been put into place. And a number of lenders have introduced twenty five year fixed term mortgages so that consumers can enjoy the same repayment from one month to the next throughout the twenty five year term.

But it seems that consumers are a little wary when it comes to fixing their mortgage rate for such a long period. The Bank of England has raised mortgage rates four times over the last nine months, taking the base rate from 4.5 percent last August to 5.5% earlier in May 2007. And because of this many consumers have been flocking to take out fixed rate deals in a bid to avoid further interest rate rises. However, according to some experts although consumers are keen to fix their rates in the short term, fixing them for over two decades is a different matter.

The Nationwide Building Society recently introduced a twenty five year fixed rate mortgage deal, but just five weeks after its launch it was scrapped. Officials from Nationwide state that they will be launching a similar product in the future. A variety of other lenders continue to offer twenty five year deals. Experts state that although a fixed rate for twenty five years can seem attractive at a time when interest rates have risen so many times in a short space of time, they can become a burden when interest rates start to fall again.