House prices rise again

HOUSE prices have risen for the seventh month in a row and interest rates were kept at a record low of 0.5 per cent - as homeowners were given a double boost today.

Read Full Story

Have Your Shout

Get posting in the Star Forums!

You can join the debate and post your own views in the lively Daily Star Forums!

LONG-TERM FIXED MORTGAGE DEALS VANISH

ABOVE: Long-term deals are disappearing from the market

12th August 2009

THE credit crunch has led to a steep drop in the number of long-term fixed-rate mortgages that are available, research showed today.

There are now just 39 fixed-rate deals with terms of 10 years or more, down from 137 products a year ago, according to financial website MoneyExpert.com.

The decline has been particularly steep for 25-year mortgages, with only one lender, Kent Reliance Building Society, currently offering a rate that is fixed for the entire mortgage term, compared with 18 different products that were available 12 months earlier.

Overall, mortgages that can be fixed for 10 or more years now account for just 3.5% of all loans, down from 15% in July 2008.

However, there is some good news, as recent cuts to the Bank of England base rate have helped to reduce the average interest rate charged on long-term fixed rate deals to 6.14%, down from 6.67% a year ago.

Pierre Williams, head of research at MoneyExpert.com, said: “The early throes of the credit crunch sparked a flight to safety as borrowers who had been stung by dramatic rises in the rates on short-term deals turned to the relative security of long-term mortgages.

“Lenders were increasingly keen on signing customers up to long-term deals because they felt the products offered some certainty for their mortgage books.

“But in the past year the full force of the economic downturn has compelled lenders to reappraise their mortgage books. Long term lending is a thing of the past unless you are a very, very safe bet with a large deposit.”