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, while consumers may benefit from better, more stable pricing, guarding against any upward trend in prices."

About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP which is among the country’s leading professional services firms, providing audit, tax, consulting and corporate finance services. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein whose member firms are separate and independent legal entities.  Neither DTT nor any of its member firms has any liability for each other’s omissions.  Services are provided by member firms or their subsidiaries and not by DTT.  Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority.  The information contained in this press release is correct at the time of going to press.