ANALYSIS

Michael Gove’s Canada-style 25-year mortgage plan won’t fix the current crisis

Borrowers have always preferred shorter deals, says James Moore

Tuesday 20 June 2023 19:35 BST
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<p>Nationwide has a highly competitive 10-year fix but consumers have proved reluctant</p>

Nationwide has a highly competitive 10-year fix but consumers have proved reluctant

Is there a solution to the mortgage crisis that doesn’t involve billions of pounds worth of taxpayers’ cash?

Amid mounting pressure on Rishi Sunak, Michael Gove has popped up with the suggestion that 25-year fixed rate home loans could work, citing their popularity in “countries like Canada”.

It sounds like a good idea; if rates are fixed throughout the entire term of a mortgage, there would be no crises created by fluctuating interest rates, which are an inevitable part of the economic cycle.

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