UK Personal Finance

In a bid to solve a potential affordability crisis, it has been suggested by the government that there should be an increase of long- term fixed rate homeowner loans, available on the market today.

Some money analyst’s feel that this is a broad solution to tackle the uncertain affordability problem, and it certainly could prove to be a difficult decision for lenders. There are only 141 products out there on the market that offer a fixed rate of ten years or more, most of which being restricted to ten- year- terms for current borrowers. This area of the market is still in its prime and is showing growth, however there is only a 6% section of fixed rate products available on the market.

While some long term packages can provide contentment for borrowers, there may be a potential consequence if rates fall as customers may be left paying a higher level of interest.

Recent hikes have been made by The Bank of England Monetary policy committee which has increased the interest rate to 5.75%, this has been the second increase in three months and the third this year.