'The cost of commitment' for home buyers

29-Mar-2007

In news which may be of interest to first time home buyers, Moneysupermarket.com yesterday issued its thoughts on Nationwide Building Society's decision to offer a new 25-year fixed-rate mortgage.

According to the price comparison website, although Nationwide's new mortgage is "interesting", a 25-year fixed-rate mortgage may present home buyers - including first time home buyers - with a certain amount of risk caused by the level of commitment required by the deal.

Under the general terms of the mortgage, overpayments up to £500 every month are allowed and interest is set at a rate from 5.49 per cent.

"Unless you have a crystal ball to foresee your own situation and future interest rates, it is ludicrous to allow yourself to be tied into a contract for this length of time," said Louise Cuming, head of mortgages at moneysupermarket.com.

However, the mortgage does allow clients to redeem early without penalty after a period of ten years.

Moneysupermarket.com offers comparisons on products that include credit cards and mobile phones.

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