Kensington Mortgages has launched a new long-term fixed rate mortgage which offers terms up to 40 years.

The lender has partnered with specialist pensions insurer, Rothesay, which will provide funding and help bring the product to market.

Available from Tuesday 23 November, Kensington’s ‘Flexi Fixed for Term’ product will allow borrowers to fix the rate paid on their mortgage, for the full term of the loan, anywhere between 11 and 40 years.

Rates will depend on the fixed term chosen and amount borrowed but are available up to 95% LTV for new purchases, or 85% LTV for remortgage, starting from 2.83% at 60% LTV for a 15-year term. Kensington also confirmed that rates on 25 and 30-year terms, at 60% LTV, are available from 2.85% and 2.90% respectively, while at 95% LTV they will be available from 3.71% and 3.77% respectively.

Recent research from Kensington showed that 83% of homeowners and renters would consider a long-term fixed rate mortgage if it provided greater certainty of mortgage repayments.

Kensington CEO, Mark Arnold, said that fixed for term mortgages are likely to become “increasingly attractive” in a rate rising environment.

“A long-term fixed rate mortgage may not always be suitable for everyone, which is why we’ve offered as much flexibility as possible with this product,” Arnold said. “For others, it could be the only way to afford a property.

“Our latest research found out that one-quarter of renters who attempted to purchase a home in the last five years were unsuccessful and of these, more than a fifth did not pass affordability checks and a quarter could not borrow as much as they needed. These products could be a serious alternative for getting people onto the property ladder who otherwise would be excluded.”
 
Rothesay chief investment officer, Prateek Sharma, added: “We are always looking for innovative ways to invest in long-term, secured and high quality assets, and firmly believe that these mortgages can provide the certainty that many borrowers are looking for.

“Through our partnership with Kensington, we’re pleased to support the government’s ambition to make new types of mortgage products available which are purposefully designed to help increase home ownership while providing long-term security.”

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