Abbey National is bringing a 10 year fixed rate mortgage to the market this week aimed at bringing peace of mind to buyers concerned about changing interest rates.
Recent studies have shown that longer period fixed rate mortgages are more popular with consumers, the 5 year versus 3 year fixed rate options proving this point very well. The move by Abbey National to bring in a 10 year fixed rate option is hoped to win more buyers over to the idea, especially as the interest rate is just 6.24 percent. There is an initial fee of GBP999 but this still represents excellent value whilst providing the security that homebuyers crave.
This longer period has impressed industry commentators too since it is expected that Abbey National mortgage customers taking out this option will not be left to face dramatically higher interest rates when the term ends, which is what is happening right now as the plethora of 2 year fixed rate mortgages come to an end.
A survey carried out by the Abbey National mortgage department suggests that the general view is of house prices stopping their fall within the next 12 months.
Speaking to estate agents the Abbey National found 61 percent of them believing that the prices would bottom out within 12 months, while the majority of homeowners expect it to be even quicker, the concensus being around 7 months. Even the most pessimistic homeowner cannot envisage price falls lasting longer than a year.
With this market view in mind around 80 percent of property owners are happy to wait and let the prices fall a little more before committing to a move. The Abbey National also found a small number of people planning to make the most of the price falls by stepping in to buy and grab a bargain.
New from the Natwest Bank is a three year tracker mortgage that, as well as being free of fees, has a step down interest rate that reduces each year.
For customers looking at a remortgage there will be no set up fees, valuation or legal fees said a Natwest Bank spokesman. In addition it will offer customers the chance to move to a different Natwest mortgage (fixed rates only) should they feel it will be better value. This option is open to customers after three months.
A Natwest Bank spokesman said that this new step down mortgage they are offering will be met warmly by customers who are looking for a simple and straightforward deal.