Fixed-rate mortgages shock

14/11/2007

The fixed-rate repayment surprise implicated a two year old fixed-rate mortgage loan, which could cost consumers thousands on the long-term.

Building society, Stroud &Swindon established that people choosing long-term fixed rate mortgage loans, normally 10-year deals, are worse off than people who had chosen shorter deals. People who selected long-term fixed rate mortgages faced better interest rates and extensive repayments.

Paul Chafer, director of Stroud &Swindon, commented: "The current 10-year mortgage deals are not necessarily the right solution. First-time buyers are usually on a very tight budget so any saving they can make on their mortgage repayment helps.

This research shows that long-term fixed rate mortgages are not always the most cost-effective option. First-time buyers will obviously be looking to move up the property ladder so will not want to be tied into a long-term mortgage."

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