Newcastle Intermediaries said the launch of a 10-year interest-only fixed rate mortgage product would increase borrowers’ long-term options.
The 10-year interest-only fixed rate is priced at 3.55 per cent up to 80 per cent loan to value (LTV) on house purchases and remortgages up to £1m. The product includes a £999 completion fee and the ability to overpay 10 per cent of the loan each year per year.
In April, Newcastle unveiled a 10-year fixed rate product and earlier this month the specialist lending arm of Newcastle Building Society added a seven-year fixed rate to its product range in response to increased borrower demand for longer-term financial security.
Franco Di Pietro, head of intermediary mortgages at Newcastle Building Society, said the mutual was committed to ensuring its mortgage products reflected the complete range of borrowers’ requirements, no matter what stage of homeownership they may be at. He said the 10-year interest-only fixed rate complemented Newcastle’s existing range, “to provide longer-term payment security and greater choice”.
He added: “Our 10-year interest only fixed rate has already received a positive reception in the market, and as we continue to keep a close eye on emerging trends we look forward to developing the best possible solutions for brokers and their clients.”
Rhys Schofield, managing director at Peak Mortgages and Protection said he was wary of long-term fixes. “Who can say where they’ll be living in 10 years’ time with enough of a degree of certainty? Not many. And that’s why super long term fixes are going to stay a niche product.”
