A new and extraordinary 25-year fixed rate mortgage deal, created by the Manchester Building Society, effectively allows people to set their repayments for the entire duration of their mortgage. Though not the first example of such a deal, it is a unique product in the market at the present time.
Four years ago, there were a handful of fixed rate deals over 25-years, according to Moneyfacts, but those looking for stability nowadays will need to look towards deals that last over a much smaller time frame, between five years and a decade.
The deal that the Manchester Building society is offering to customers offers them a fixed rate of 5.23 per cent over the period, for an arrangement fee of about a thousand pounds on a ‘loan-to-value around the 80 per cent mark. As a rough guide, a loan of £150,000 taken over the full duration of the offer would offer fixed payments of just shy of £900 a month throughout.
There are some notable positives to this approach, notably that there is no need to chase better deals by having to re-mortgage every few years, which can be a stressful process. Equally, there are no concerns over how your rate will be affected by the bank’s base rate, due to the fixed rate, and it allows homeowners to budget on a much more long-term basis, safe in the knowledge that unless they move home they never again need to think about their mortgage.
Applicants for the mortgage have to be fall between the ages of 25 and 70 and have an almost flawless credit history, and must be earning £20,000 a year minimum if applying as a single applicant, in a role which they have held for at least six months. Equally, the property itself must have a value of at least £125,000.