23 Aug

Long-term and lifetime mortgage gap 'increases'

Long-term and lifetime mortgage gap 'increases'

The gap between long-term and lifetime mortgage rates for homeowners looking for a house for sale in the UK has increased.

According to recent research by Defaqto, the division between interest rates for lifetime mortgages and those for long-term fixed-rates loans has "widened considerably over the last two years".

Banking specialist at Defaqto David Black said this could be the result of a number of mortgage providers leaving the property industry during the economic downturn.

Findings revealed that the average interest rate for lifetime mortgages in August 2010 is 7.17 per cent, while in August 2007 it was 7.06 per cent.

It also showed that the average interest rate for a long-term fixed-rate loan was 5.72 per cent this month and 6.43 per cent three years ago.

The Council of Mortgage Lenders recently revealed that the amount of money lent to homebuyers was five per cent greater in July compared with the previous month.

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