Long-term mortgage deals mark credit crunch 'flight to safety'

28-Jul-2008

Borrowers and lenders are increasingly turning to long-term mortgage deals in an attempt to beat the ongoing credit crunch, according to one financial comparison site.

MoneyExpert.com claims the proportion of fixed-rate mortgages available with terms of more than ten years has almost doubled over the past year.

Furthermore, the percentage of the fixed-rate mortgage market offering deals with terms of 120 months or more has increased from eight per cent in July 2007 to 15 per cent this month, the website says.

It adds that there are currently 18 different 25-year fixed-rate deals available, compared to nine in July last year.

Sean Gardner, director of MoneyExpert.com, remarked: "The credit crunch has prompted a flight to safety by borrowers who have been stung by dramatic rises in the rates on short-term deals.

"At the same time lenders are increasingly keen on signing customers up to long-term deals which offer them certainty."

In other mortgage news, Abbey is expected to release results this week that will see it overtake Halifax and become Britain's biggest mortgage company.

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