Nice Loans.co.uk > News > Fixed Rate products requested

Government requests more Fixed Rate lending products

Fixed rate mortgages are incredibly popular at the moment with in excess of 80% of new mortgages being arranged on fixed rate terms, at least for the initial period. However many of the current fixed rate deals last only one or two years before they revert to the lenders standard variable rate.

A series of interest rate increases was perhaps the stimulus for the government to suggest that lenders should offer more choice in longer fixed rate products. There are currently over one hundred mortgage products that boast a fixed rate for 10 years or longer and Nationwide has recently reintroduced it's 25 year fixed mortgage - this time round at 6.39%.

Fixed rates have been popular for a long time when it comes to personal loans. These fixed rate loan deals normally apply to smaller unsecured deals over short terms where the risk of base rates varying is minimised. Normally loans being repayed over longer periods, typically secured loans, will be arranged with variable rate terms, where the interest charged can go up as well as down during the period of the loan.

Fixed rate deals can be great for people with fixed budgets, who may not be able to stomach an increase in repayment costs, but they are a calculated risk for the lender and the borrower. Great if you fixed rate is below the standard rate but not so nice if it's higher and especially not nice if you are stuck with it for 25 year!

<<< Back to news page | Get a personal loans quote >>>