Minister calls for 30-year fixed-rate home loans

Housing minister Grant Shapps was today expected to call on lenders to consider offering fixed mortgages of up to 30 years to encourage greater market stability.

Mr Shapps will tell a seminar in London that he wants to spark a national debate on longer-term fixed mortgages as a “normal and sensible choice”.

There are currently no mortgages with guaranteed lifelong interest rates and longer-term deals often require sizeable deposits.

Mr Shapps is expected to say: “In today’s uncertain world, people want to know where they stand.

“Yet when it comes to buying a home, there are no mortgages available for them where they can fix their payments for a long time – the longest fixed-rate mortgage for many is five years.

“Longer-term mortgages – possibly as long as 30 years – could help families on tight budgets know exactly where they stand when they’re buying a home, by giving them greater certainty over how much they will be paying for their home in years to come.

“While they won’t be right for everyone, lenders should start to look at the case for 30-year mortgages.”

He will tell the Building Societies Association’s Annual Mortgage Seminar the government wants to see stability in the housing market and for interest rates in the long term.