View more on these topics

Nationwide sets 25-year fix at 5.49%

Doubts over borrowers wanting to be locked in for so long

Nationwide Building Society has become the first major lender to offer a 25-year fixedrate mortgage at 5.49 per cent.

The launch comes as interest rates are expected to rise again from 5.25 per cent in the coming months .

The loan is welcomed by experts although questions have been raised about whether borrowers want to be locked in for so long.

There are no early repayment charges after the first 10 years and borrowers can overpay, underpay and take payment holidays. There is a res-ervation fee of 599, with a 200 discount for existing borrowers. The redemption penalty in the first 10 years is 3 per cent of the balance.

Other lenders offering similar deals are Cheshire Building Society and Kent Reliance. Newcastle Building Society offers a 20-year deal.

London & Country head of communications David Hollingworth says he expects more lenders to launch long-term deals.

He says: “I think it is an OK deal although I do not think people will want to be locked in for that amount of time.”

Moneyfacts mortgage analyst Julia Harris says: “Nationwide is reacting to an increase in demand for longer-term fixed rates due to recent rises in interest rates. It is nice to see the option of redeeming after 10 years without penalty.”

Nationwide executive director Stuart Bernau says: “It not only offers long-term good value to borrowers looking for the security of fixed payments but also the flexibility of a 10-year deal.”

Recommended

Education Crisis

Helen Pow reports on the need to set out clearly the advantages of income protection insurance which is widely misunderstood.

Bupa online system for group cover

Bupa Group Risk has set up an online system that enables intermediaries to generate a quote and buy cover within 30 minutes. The platform offers a range of group protection products suitable for smaller schemes.

High demand brings Cheshire backlog

Prudential says it will support advisers in the changing market environment by maintaining an initial commission option and introducing a factory gate pricing model on its unit-linked bond in the third quarter.The two payment options will run in tandem from the autumn. The company has not set a deadline for withdrawing its current initial commission […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com