25 Year Fixed Rate Mortgages?

25 year fixed rate mortgages will become commonplace, Alistair Darling, the current chancellor, said.

Fixed rate mortgages are currently a popular choice, with the security of knowing what payments you are going to be making. But the vast majority are currently for 5 years or less (about 3150 of the 3289 listed in the Fixed Rate Mortgage Chart end in or before 2013).

Mr Darling is planning to encourage the launch of more fixed rate mortgage loans with terms of up to 25 years, to give extra security to hard pressed buyers.

'For many households, particularly those on low incomes, fixing the level of mortgage repayments for several years makes real sense,' the Chancellor added. 'It can also contribute to wider macroeconomic stability.'

He also wants the penalties for early redemption reduced so that homeowners are not punished as severely for paying off or moving their mortgage.

There are currently a handful of 25 and even a couple of 30 year fixed rate mortgages available, but they are few and far between.