Should UK mortgages rates be fixed for their full-duration?

Discussion in 'Property Finance and Real Estate Loans' started by totallyproperty, May 4, 2014.

  1. totallyproperty

    totallyproperty Administrator Staff Member

    If you look at the US real estate market there is finance available for property purchasers with a fixed rate for the full term. This allows property buyers to plan ahead in the knowledge that their mortgage rate will remain constant and will not fluctuate. So far there are very few in the way of similar options available in the UK mortgage market for a number of reasons.

    One of the main reasons that US mortgage companies are able to offer fixed term rates for the full duration of any financial arrangement is because of a liquid money market in long-term funding instruments. The European/UK market in this particular area is not as competitive and the rates are not as attractive as they should be. If governments across Europe decided to place more emphasis upon long-term fixed mortgage arrangements then surely they could instigate more competition in the longer end of the money markets?
     
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