Alistair wants to shake up mortgage market

According to the Chancellor of the Exchequer, Alistair Darling, longer term fixed rate mortgages for twenty five years are set to become the norm as part of a radical shake up of the mortgage market.

Darling has been pushing for more affordable long term fixed rate mortgages from lenders for some time, after homeowners were hit with crippling costs following a series of five interest rate rises over the past year and a half.

Fixed rate mortgages have always been very popular amongst those looking to enjoy increased financial stability, as the repayments on the mortgage remain the same for the duration of the fixed term no matter what happens with interest rates.

Most people tend to take fixed term mortgages out over two, three, or five years, but Darling wants to encourage people to opt for twenty five years on a fixed rate.

He recently stated: ‘For many households, particularly those on low incomes, fixing the level of mortgage repayments for several years makes real sense. It can also contribute to wider macroeconomic stability.’ He said that longer term fixed rate deals would increase stability and financial security for many households and he urged lenders to look at offering more affordable long term fixed rate deals.

Rising interest rates have made life very difficult for many homeowners over the past year, but in the last three months the base rate has fallen twice, easing the financial strain for many.

However, despite these rate cuts other rising costs have once again added to the financial woes of many households, with increases in costs such as energy, food, and petrol.