This week, JLM Mortgage Services director Rory Jospeh and head of mortgage finance Sebastian Murphy proposed introducing seven or 10-year fixes into the market to cater for higher loan to value (LTV) borrowers.
They also criticised the market’s moved to launch sub-one percent rates, arguing that they could be the “equivalent of a chocolate teapot”.
John Azopardi said: “The last thing my clients need are seven or 10-year fixed rates. The last person who successfully planned seven years ahead was Joseph wearing a technicoloured dream coat in Egypt.”
He continued: “The reason that these products [seven and 10-year fixed rates] are rarely taken up is that they are over-priced and inflexible. Clients often pay more than on a five-year rate, coupled with the inflexibility of a long early repayment charge (ERC).
“If penalties dropped off or reduced drastically after five years then maybe – and if the rate was slightly over the five-year rate then possibly – but until then I would suspect that very little business is transacted at seven and 10 years.
He added: “More to the point, if the lenders are buying in more lending at sub 60 per cent to improve market share and to ensure that they can do more high loan to income lending above 85 per cent I am all in favour of their stance. That’s a win-win for all my clients and we get the added bonus of news space when we are competing with Euro 2020 and the Delta variant.”