News Article Published:
Tuesday, 14 August 2007
Category:
Financial Services
All Types of Mortgages (AToM) has warned that mortgage providers could face allegations of misleading marketing after a number of firms have launched 25-year fixed-rate deals.
The mortgage distributor and packaging specialist said that although finance firms can advertise the deal correctly for now, the future could hold claims of misselling as market conditions could change.
AToM said that future interest rates could fall and there are no guarantees for future property moves.
The company said that it would welcome some regulation of long term fixed-rate deals to address these sorts of modern concerns.
Vic Jannels, chairman of AToM, said: "Long term fixed rates would have been ideal 50 years ago, when men were the principal earners and there was an acceptance that both jobs and marriage were for life. Nowadays, people's income and circumstances are much more changeable. People will often change jobs five or six times in a working lifetime, often necessitating relocation.
"Furthermore, many international companies will send their employees abroad for a short-term contract and the employee's property is usually rented out in these circumstances.
He added: "The government has often recognised the importance of labour mobility for a successful economy and it must also therefore ensure that these long term proposals support this, as well as acknowledging the reality of life today."
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