With rates still low why not get a fixed lifetime mortage?

Sprogger

Sometimes I feel I should've done this earlier, before the rates went up slightly as I can't really see a downside but feel that my naivety is making me unaware of the downsides otherwise everybody would be doing it;



Since the interest rates are currently so low, wouldn't it be prudent to get either a 10 year or lifetime fixed rate mortgage?


I mean, let's say in the next few years the rates go up to 5 or 7 percent, surely someone who took out this type of mortgage now would be sitting pretty? Isn't it all about hedging your bets so if the rates went down instead then you wouldn't be losing much since the rates can't really go a lot much lower?


What are the reasons 'not' to take this length of mortgage? If I wanted to get some equity or move home, would I be heavily penalised?


With rates so low, why not just get the longest, lowest fixed rate?


Thanks very much.

enthusiasticsaver

For some reason a lot of lifetime mortgages will only lend up to about 50% LTV. They also aren't that low and many people only think ahead about 3-5 years. Also, as you say it is difficult to say how long you will want to stay in the house if circumstances change ie divorce or death or children etc and presumably there are penalties if you redeem it. 25-35 years is a long time to commit to one lender.