Kensington Mortgages is launching its first long-term fixed rate mortgages tomorrow, allowing borrowers to freeze their monthly payments between 11 and 40 years.
Flexi Fixed for Term offers are priced differently depending on the term chosen and the amount borrowed, but are available up to 95% LTV for new purchases or up to 85% LTV for remortgages.
Rates start from 2.83% to 60% LTV for a term of 15 years.
Rates over 25 and 30 years, at 60% LTV, start at 2.85% and 2.90% respectively.
The 25 and 30 year rates, at 95% LTV, are available from 3.71% and 3.77% respectively.
Affordability is based on the fixed interest rate, not a higher SVR stress rate, which means many applicants may be able to borrow more than they would with a standard mortgage. .
Kensington’s Flexi Fixed for Term offers are transferable as long as the new property meets the lender’s criteria.
The products are delivered with free legal notices and without product costs.
Gift deposits are allowed as long as they meet the eligibility criteria defined by the lender.
A 0.75% proc fee will be paid upon completion to brokers, including mortgage clubs and networks.
No prepayment charges apply in the event of a move, sale, serious illness or death.
Overpayments are allowed up to 10% of the initial balance per year.
If a client wishes to borrow more money, they have the option of requesting an additional advance, with the option available after 12 months subject to affordability.
Recent research from Kensington Mortgages reveals that 83% of homeowners and renters would consider a long-term fixed rate mortgage.
Kensington partnered with specialist pension insurer Rothesay, which funded the products.
Long-term mortgages are a good match for the retirement obligations they protect.
Mark Arnold, Managing Director of Kensington Mortgages, says: “Over the past 12 years we have grown accustomed to ultra-low interest rates.
“Many owners have never known anything else. But nothing lasts forever, and it looks very likely that we’ll see a succession of interest rate hikes and can slowly begin to move closer to a historic average again.
“A fixed-term mortgage – already very popular in parts of continental Europe – is likely to become increasingly attractive in a rising rate environment.
“There are no two people or their circumstances are not the same.
“Whether you’re a first-time buyer or an owner looking to improve affordability, a self-employed person worried about remortgage or someone who wants greater certainty on monthly repayments – our new Flexi Fixed for Term can help you. to help.
“With a single, fixed monthly payment until the end of the mortgage, additional borrowing power and increased flexibility for any life event that may arise, it’s that simple.
“A long-term fixed rate mortgage may not always be right for everyone, which is why we’ve provided as much flexibility as possible with this product. For others, it might be the only way to afford property.
“Our latest research found that a quarter of tenants who have tried to buy a home in the past five years have failed, and of those, more than a fifth failed affordability checks and a quarter could not borrow as much as he needed.
“These products could be a serious alternative for bringing people to the property ladder who would otherwise be excluded.”
Rothesay Chief Investment Officer Prateek Sharma said: “As the UK’s largest specialist pension insurer, Rothesay is well positioned to support these long-term loans which have an important role to play in the market. .
“We are always on the lookout for innovative ways to invest in long-term, secured, high-quality assets, and strongly believe that these mortgages can provide the certainty that many borrowers are looking for.
“Through our partnership with Kensington, we are delighted to support the government’s ambition to deliver new types of mortgage products specifically designed to help increase homeownership while providing long-term security.”