Why cautious Britons are shunning European-style mortgages

finance
Created 11/4/2024
Updated 11/4/2024

European-style long-term fixed-rate mortgages, designed to help stretched buyers, are struggling to gain traction in the UK. While such deals offer lower monthly payments and shield borrowers from rate fluctuations, they come with high early repayment penalties, discouraging uptake. Borrowers are favoring shorter fixes amid volatile interest rates and expectations of future declines. According to UK finance data, long-term fixes dropped sharply, from £1bn in loans at their peak to just £50m in June 2023. Limited competition, high costs, and cultural preferences for flexibility further reduce their appeal, contrasting with continental Europe, where 10- to 40-year fixes are more common.

Original Article


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