With inflation accelerating and the Bank of England poised to raise interest rates, a UK mortgage Ipass direct lender loans is offering homebuyers one less reason to worry.
Kensington Mortgages is launching a fixed rate loan for up to 40 years, which means that a borrower would pay the same amount every month, regardless of how interest rates move. It offers 11- to 40-year mortgages, with retirement insurance specialist Rothesay Life providing the funding Ipass direct lender loans
The deal is unusual for the UK, where customers are encouraged to remortgage every few years for better rates. The ultra-long fixed rate mortgage market is still relatively new and fixed rate products have proven to be the most popular type of home loan for years. The request is generally for periods of less than five years.
The move follows expectations that the era of record interest rates is coming to an end. Investors are betting that the Bank of England will increase the benchmark cost of borrowing by 0.1% as early as next month.
“Nothing lasts forever, and it looks very likely that we will see a succession of interest rate hikes and can slowly begin to approach a historic average again,” said Mark Arnold, CEO of Kensington Mortgages. “A fixed-term mortgage – already very popular in parts of continental Europe – is likely to become more and more attractive in a rising rate environment. ”
The Bank of England is considering a measure to control inflation and prevent a compression in the cost of living from turning into a spiral of rising prices and wages.
Inflation is expected to hit 5% by spring, more than double the Bank of England’s target. While an increase in natural gas and electricity is largely responsible for this, there has been a sharp rise in the cost of goods and a labor shortage is pushing up wages as the government plans a significant tax increase in April.
Banks are responding with ways to ensure consumers can stabilize their finances. Earlier this year, online broker and lender Habito launched a fixed rate mortgage for up to 40 years, starting at 2.99%. This deal was for those with a 40% down payment. The cost rose to 4.65% for longer-term contracts.
At Kensington Mortgages, 30-year loan rates will start at 2.9% with a 40% down payment, and 3.77% for new buyers borrowing 95% of the property’s value. Short-term mortgage rates are lower.