Gove (pictured) told The Telegraph that longer-term fixed rate deals ‒ which are more common in the US and Canada ‒ would mean borrowers were not exposed to the sorts of wild swings in interest rates being seen at the moment.
He said: “One of the things that I think is right for levelling up over all is making sure we can develop the types of products that are elsewhere in the world – particularly in countries like Canada – which are long term, fixed rate mortgages, so you don’t get the oscillation of how much you pay every two or five years, but you have certainty over as long as 25 years on what you pay. I think that is something we should look at.”
Gove’s comments came after the average rate for two-year fixed rate mortgages passed the six per cent threshold for the first time since December, according to data from Moneyfacts.
Mortgage rates have accelerated swiftly in recent weeks, off the back of figures from the Office for National Statistics suggesting that high inflation will linger for longer than expected.
Longer-term fixed rates have long been floated by various governments in the UK over the last couple of decades, without ever really taking off. However, a host of lenders appear to be close to launching such deals, with Mortgage Solutions exclusively revealing that Perenna is on course to launch 20-year fixed rate deals in Q4 of this year.
