Commenting on the Government's plans to encourage lenders to offer longer term fixed rate mortgages, Chris Samson, head of secured lending at Deloitte, said:
"Despite the Government's desire for lenders to offer long term fixed rate mortgages to consumers, a substantial industry effort would be required to persuade the public to buy them. Recent research by YouGov for Deloitte, indicated that only one in 10 borrowers would consider fixing their mortgage rate for between 10 and 25 years.
"However, there does appear to be untapped consumer appetite for 5-10 year deals. Nearly four out of 10 borrowers (38%) would consider a fixed rate of up to five or 10 years, suggesting that there is room for product development and innovation in this space.
"While changing lenders every two to three years is in the interests of the consumer, churn is bad news for the lenders. In short, it's more expensive to acquire new customers than to retain existing ones. Consumers are clearly price sensitive, but our research tells us that there is an appetite for offering fixed rate mortgages of between 5-10 years, which could bring mutual benefits if the banks can develop the right products and pricing.
"Moving towards longer term fixed rates would be more equitable for both lenders, who will get greater certainty,
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