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Long-term mortgages have "sting in their tail"

Homeowners with a long-term mortgage have been warned that they could be hit with a large penalty fee by trying to leave their deal early.

Long-term home loans are increasingly popular among the UK's householders but could hold an unpleasant surprise for people who do not familiarise themselves with the terms and conditions, moneysupermarket.com stated.

According to the price comparison website, early repayment charges (ERCs) can often exceed £10,000 for homeowners who attempt to redeem their mortgage after just two years.

"Longer-term mortgages are very much in vogue at the moment, but their ERCs potentially have quite a sting in their tail," said Lousie Cuming, head of mortgages at moneysupermarket.com.

"The trouble with committing to a longer-term mortgage is people never know how their circumstances may change," she added.

A spokesperson for the National Housing Federation recently commented on the number of mortgage holders moving from London to outlying commuter towns due to the unmanageable cost of living in the capital.

Personal loans can help with home expenses.

See how much you could borrow with a home loan from Lombard Direct.
© Adfero Ltd

12/11/2007 17:22:40

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