Abbey pessimistic over 25-year fixed-rate loans

Abbey Mortgages has responded to the Prime Minister’s enthusiasm for the introduction of more 25-year fixed rate mortgages with claims that this type of product will not appeal to most UK borrowers.

Abbey surveyed 1,000 people and found that only 23% could confirm they would consider a 25-year fixed-rate mortgage.

A narrow majority of respondents (54%) said that they would definitely not take out such a long-term loan and 23% were unsure.

Of those resistant to the idea of a long-term fixed-rate mortgage, 27% were put off by the duration of the term, another 27% felt the future was too uncertainty for such a commitment and 23% believed that interest rates would fall and they would end up paying dearly for their property.

As far as Abbey is concerned, it has launched 25-year mortgage products in the past only to find that demand has been limited.

The results of the Abbey survey will be disappointing to the Government, which sees the 25-year fixed-rate mortgage as a means of stabilising the housing market.

Such mortgages are common in continental Europe but have yet to grasp the imaginations of the UK house purchasers.

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