The pros and cons of Nationwide's new 25-year fixed-rate mortgage have been assessed by a financing expert.
This week, the financial services provider unveiled a new long-term mortgage with lending rates fixed at 5.49 per cent for the lifetime of the deal, accompanied by a £599 arrangement fee.
Analysing the mortgage, Ray Boulger, senior technical manager at mortgage specialist John Charcol, pointed out that people looking to borrow up to 75 per cent loan-to-value could arrange cheaper deals through other mortgage lenders .
However, he suggested that homeowners looking for a loan-to-value of between 75 and 90 per cent may be tempted by the package and also contended that its reduced-length early repayment charges could prove attractive.
"This Nationwide mortgage addresses one of the main reasons why most people don't buy long-term deals, ie the early repayment charge," he said.
"It does this by only imposing this charge for the first ten years."
The Nationwide mortgage has also received a mixed reception from other financing analysts.
Louise Cuming, head of mortgages at financing website moneysupermarket.com, suggested that it was "ludicrous" to tie into a long-term mortgage since it was impossible to forecast interest rate decisions over the coming years.
Nationwide's long-term mortgage dissected
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Nationwide's long-term mortgage dissected
Thu, 29 Mar 2007
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