New 25-year fixed-rate launched by Nationwide

Following the announcement of the government's support for long-term mortgages, Nationwide has revealed a new deal which keeps the rate constant for 25 years.

The interest rate is fixed at 6.39 per cent over that period, which is 0.64 per cent above the current Bank of England base rate - which of course may change over time, with many analysts suggesting it could rise above six per cent by the end of the year.

"The chancellor has recently expressed concern that most lenders do not offer long-term fixed rates," said Nationwide's executive director Stuart Bernau.

"Our experience is that the 25-year fixed rate has a place in the market and offers long-term stability and flexibility for borrowers who want to protect against fluctuations in interest rates."

Features of the fixed rate mortgage offer include the ability to overpay by £500 a month and so cut down the length of the mortgage, while there are no early repayment charges after the first ten years which gives the customer the flexibility to free themselves from debt without penalty if their circumstances change for the better.

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