Even though government officials are encouraging banks to offer long term fixed mortgages, few are stepping up to the plate. Right now, it is much more common to find a five year fixed rate mortgage that switches to a variable rate at the end of that term than it is to find a ten or twenty year fixed mortgage. Only a handful of banks in the United Kingdom are currently offering more than twenty years for a fixed rate mortgage.Traditionally, consumers have seen fixed mortgages as a safer bet, since they don’t have to worry about interest rates going up. However, in the past few years, rates dropped so low that many were lured into getting a variable rate. This led to disaster as soon as the rates went back up and the fixed mortgage term ended. The result has been defaulting loans in record numbers and numerous foreclosures. The trend is expected to continue as nearly 3 million homes in the UK are scheduled to switch from a fixed mortgage to a variable rate during this year. Experts are urging homeowners to refinance as quickly as possible to a new fixed mortgage before this happens.
Related reading: Fixed Mortgage
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