Bank of England will provide a 40-year fixed-rate mortgage
British bank Kensington Mortgages will launch a 40-year fixed-rate mortgage on Tuesday, which will be one of the first such products in the UK market.
The lender has partnered with Rothesay, the UK’s largest pension insurance expert with more than £60 billion in assets, to fund long-term mortgage loans.
Its “Flexi Fixed for Term” mortgage will allow the borrower to determine the interest rate paid on the mortgage for the entire loan term-between 11 and 40 years.
Kensington Mortgages CEO Mark Arnold (Mark Arnold) said that although many homeowners know nothing other than ultra-low interest rates, Environment may change.
“Nothing is eternal, we are likely to see successive rate hikes, and we may start to slowly approach the historical average,” he added. “Fixed-term mortgages-already very popular in some parts of continental Europe-may become increasingly attractive in an environment of rising interest rates.”
The interest rate will depend on the fixed term selected and the amount borrowed. 95% of the loan value mortgage will be used for new purchases and 85% of the LTV will be used for remortgage.
For mortgages with a maximum maturity of 35 years and 40 years, the interest rate will start at 3.16% and 3.34%, respectively, and the LTV will be 60%. Mortgages with shorter maturities will have lower interest rates—the same LTV’s 15-year product has a starting interest rate of 2.83%. For the 25-year and 30-year terms, the interest rate will be 2.85% and 2.90%, respectively.
The Financial Times reported last month that Rosesey was Ready to launch long-term mortgages in England.
Extend the traditional fixed interest rate Mortgage loans are an established priority of the British government and will break the trend of switching transactions every two or three years.
John Glenn, Minister of Economy at the Ministry of Finance, welcomed this development. “More product choices create more competition and more choices for consumers, in this case, especially those who value the certainty of long-term repayment,” he said.
Long-term fixed-rate mortgages are an attractive market area for Rothesay because it requires fixed long-term assets to match its fixed long-term liabilities. The pension insurance company is expected to announce further cooperation with other lenders soon.
Rothesay Chief Investment Officer Prateek Sharma said: “We are always looking for innovative ways to invest in long-term, secured and high-quality assets.” He added that the company “strongly believes that these mortgages can provide the certainty that many borrowers are looking for. sex”.
Online broker and lender Habito launched a long-term fixed-rate mortgage with a maximum trading period of 40 years in March Start 2.99%. Borrowers pay an interest rate of 4.45% for 31 to 35 years of mortgage on 60 LTV, and the interest rate rises to 4.65% over a period of 36 to 40 years.