Few and far between ... but they are out there

Few and far between ... but they are out there

Nationwide hopes to whip up interest in long-term fixed-rate mortgages with the launch on Tuesday of a 25-year fixed-rate home loan. But, at 6.39%, its deal is the most expensive of the few that are currently available.

To get that rate, you need to be a homebuyer able to stump up a deposit of more than 10%; if you can only manage to put down 5%, the interest rate jumps to 6.79%. Those remortgaging must also pay a higher rate: either 6.49% or 6.89%.

So, the rate is not so great. But to be fair, you are not actually tied to this deal for the full quarter-century because it imposes no early redemption penalties after the first 10 years. In other words, borrowers get the security of the same mortgage payments for 25 years but are "locked in" for only 10, after which they have the option of switching to a new deal without incurring penalties.

The deal is portable - you can take it with you when you move home and top it up with an additional loan if you wish to move to a larger property. It also allows people to overpay, underpay and take payment holidays. The fee is £599, or £499 for existing Nationwide borrowers.

· Kent Reliance's 25-year fix is quite a bit cheaper - the rate is 5.98%. But the big problem with this deal is that there are redemption penalties for the full 25 years. So, if you switch away before 2032 you must pay a penalty of 3% of the amount repaid. The loan is portable, and is available to those who can manage.....continued below

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a 5%-plus deposit, in which case there is a £595 fee to pay. The fee is smaller (£495) for those borrowing a maximum of 75% of the property's value.

· Cheshire building society's 25-year fix is priced at 5.99%, and is arguably the pick of the bunch; there are redemption penalties for 20 years, but it offers penalty-free "escape windows" allowing you to jump ship after the first five years, then every other year after that.

Some might say these are fairly narrow windows of opportunity. For example, if you want to switch to a better deal after five years, the society has to receive your written notification during the month of August 2012, and you then have two months in which to redeem the home loan.

"If you are moving house, that could be a pretty tricky one to time," says David Hollingworth at broker London & Country. Minimum deposit is 5% and the arrangement fee is £899.

· Manchester building society will let you fix your payments at 5.99% for 10 to 30 years, with redemption penalties for the first 10 years. Minimum deposit is 15% and the fee is £895.

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