Bank of England 'open' to exploring long-term fixed rate mortgages

During a press conference yesterday, Andrew Bailey, governor of the Bank of England, said: “Our approach is that we will support and engage in any process which wants to envisage innovation in the market.

“It’s something we would certainly support a review of to see what is possible in the market. If it comes forward we will certainly play our part in it.”

The Bank of England’s deputy governor for prudential regulation and chief executive of the PRA, Sam Woods, added: “There are other non-UK markets which function perfectly well which do have much longer, fixed-rate mortgages.

“I think not often 50 but much longer than we're used to. So I think if such a product came forward in the market we’d approach that with an open mind.

“Our job would be to make sure the prudential regulation could be adapted as needed to capture any risks that came with that.”

Last week, Boris Johnson announced that the government is exploring plans to introduce 50-year fixed rate mortgages to the market, which could be handed down from parents to children.

In 2021, new mortgage lender Perenna secured $10 million in funding to bring Danish-style 'fixed for life' mortgages to the UK market.

Later that year, both Kensington and Habito announced the launch of 40-year fixed rate mortgage products.