Specialist lender Kensington
Kensington, a specialist lender, has introduced a rare 40-year fixed-rate mortgage to the UK market. This long-term financing option offers notable advantages to borrowers adapting to the dynamic housing landscape. You may find our previous post of interest, “Stamp Duty Holiday | £139M A Year Tax Boost For Treasury.”
One key benefit of a 40-year term is the ability to spread repayments over an extended period. This can significantly reduce monthly payments, making homeownership more affordable for many individuals. Traditional 15- or 30-year mortgages typically result in higher monthly costs.
This mortgage product ensures long-term financial predictability for those seeking stable interest rates. Fixed rates mean borrowers can avoid fluctuations caused by changes in the broader economy. Consequently, this offers homeowners peace of mind when planning their budgets over several decades.
First-time buyers may find this mortgage particularly appealing due to its affordability features. Housing markets with high property prices often present barriers to entry. However, the extended loan term helps alleviate these challenges by lowering immediate financial pressures.
The 40-year fixed-rate mortgage can also benefit buyers looking for properties in high-cost areas. With rising property prices in many regions, affordability remains a critical concern. This innovative solution caters to individuals aiming to secure long-term stability in challenging markets.
Overall, Kensington’s new mortgage offering addresses evolving borrower needs while reflecting current market trends. Whether purchasing a first home or considering an upgrade, this product combines flexibility and stability for lasting financial security.
What do we know?
Recent research by Kensington Mortgages highlights that 83% of homeowners and renters prefer long-term fixed-rate mortgages. This preference stems from the desire for certainty in monthly repayments.
In collaboration with Rothesay, a specialist pensions insurer, Kensington Mortgages has launched an innovative mortgage product. Rothesay will provide the required funding to support this offering.
Competitive Interest Rates for Different Terms
Interest rates depend on the fixed term selected and the amount borrowed. These rates apply to home purchases with a loan-to-value (LTV) ratio of up to 95% or remortgages with an LTV of up to 85%.
- Rates start at 2.83% for a 15-year term with a 60% LTV.
- For 25-year and 30-year fixed terms, rates begin at 2.85% and 2.90% at a 60% LTV.
- Extended terms with a 95% LTV have rates of 3.71% for 25 years and 3.77% for 30 years.
Enhanced Affordability and Flexibility
The ‘Flexi Fixed for Term’ product focuses on affordability. Unlike traditional mortgages, it uses a fixed interest rate instead of a higher stress rate to calculate affordability. This can enable clients to borrow larger amounts.
This mortgage also provides excellent flexibility. It is portable, meaning borrowers can transfer it to a new property without changing the interest rate or monthly payments.
Additional Features and Benefits
Kensington Mortgages offers several benefits to enhance this product’s appeal:
- Complimentary legal services and no product fees.
- Acceptance of eligible gifted deposits.
- No early repayment charges for moving, selling, critical illness, or death.
Borrowers can also make up to 10% overpayments per year based on the original loan balance. For additional funds, a further advance can be requested after 12 months, subject to affordability checks.
Broker Incentives
Brokers, including mortgage clubs and networks, receive a 0.75% proc fee upon completion. This offering aims to provide homeowners and renters with a reliable, flexible mortgage solution tailored to their needs.
With competitive rates, enhanced flexibility, and significant benefits, this product addresses key homeowner concerns in today’s UK mortgage market.
Let’s hear from the experts.
Mark Arnold, CEO of Kensington Mortgages, commented: “We have grown used to ultra-low interest rates over the last 12 years. Many homeowners have never known anything different. But nothing lasts forever. It seems likely we will see a series of interest rate hikes. We may slowly approach a historical average.
A fixed-for-term mortgage, already popular in parts of Europe, will become more attractive in a rising rate environment.
“No two people or their circumstances are the same. Whether you’re a first-time buyer or homeowner wanting an affordability boost, a self-employed worker worried about remortgaging, or someone wanting greater certainty on monthly repayments – our new Flexi Fixed for Term can help.
It is that simple, with one fixed monthly payment until the mortgage ends, extra borrowing power, and added flexibility for any life events.
“A long-term fixed-rate mortgage may not always be suitable for everyone, so we’ve offered this product with as much flexibility as possible. For others, it could be the only way to afford a property.
The research
Our latest research found that one-quarter of renters who attempted to purchase a home in the last five years were unsuccessful. Of these, more than a fifth did not pass affordability checks, and a quarter could not borrow as much as they needed. These products could be a serious alternative for getting people onto the property ladder who would otherwise be excluded.”
Prateek Sharma, chief investment officer at Rothesay, stated, “As the UK’s largest specialist pensions insurer, Rothesay is well-positioned to support long-term loans. These loans play an important role in the market. We continually seek innovative ways to invest in long-term, secured, high-quality assets. We believe these mortgages provide the certainty many borrowers seek.
Through our partnership with Kensington, we support the government’s ambition to offer new mortgage products. These are purposefully designed to increase homeownership while providing long-term security.”
Economic Secretary to the Treasury, John Glen, commented, “I am delighted to see new products like this. I am always pleased to see innovation in the UK mortgage market. Greater product choice creates more competition and options for consumers. This is especially beneficial for those who value certainty in their repayments over a longer period.”
What does that mean to Connect?
Connect, a forward-thinking mortgage network, aligns seamlessly with the innovative mortgage product specialist lender Kensington Mortgages introduced. Committed to providing brokers and their clients with cutting-edge solutions, Connect recognises the value of options like the ‘Flexi Fixed for Term’ mortgage. This partnership allows Connect brokers to offer their customers a dependable, flexible mortgage choice that caters to individual needs.
The competitive rates, portability, and emphasis on affordability perfectly complement Connect’s mission to empower brokers to deliver the best financial solutions to their clients. Connect ensures that brokers can take full advantage of this new offering and continue to provide exceptional service while benefiting from a 0.75% proc fee upon completion.
Together, Connect and specialist lender Kensington Mortgages are poised to meet the evolving demands of the mortgage market, offering a product that aligns with the ever-changing needs of homeowners and renters.
Thank you for reading our publication “Specialist Lender Kensington | 40-Year Fixed Mortgages.” Stay “Connect“-ed for more updates soon!
