Less than 5% of new mortgage loans taken out today are 'long term fixes'. This means that most homeowners borrowing against the value of their homes are opting for 2, 3 or 5 year deals.

Why is this? According to the government, the lack of good value longer term fixes means that borrowers are forced to take short term deals. Indeed, to Gordon Brown's mind, the cost of remortgaging every two or three years is an unnecessary expense which deters first time buyers and pushes up the cost of buying and maintaining a house. Furthermore, he argues that it contributes to house price inflation and volatility in the market.

The government has announced that it plans to introduce 'covered bonds' which would allow lenders to finance long term fixes, making them more attractive to borrowers and providing more stability in the housing market.

Most have welcomed this move, although it might be churlish at this point to remind Gordon of the lack of housing supply over the last ten years being a huge contributor to price inflation. This factor- pure supply and demand- has had far more of an impact on the market than mortgage products.

However, long term fixes aren't for everybody. Lenders like Kent Reliance and Nationwide have recently introduced innovative 25 year fixed rates, but there are still Early Redemption Fees attached to them should you decide to redeem your mortgage early. Given that the average marriage now only lasts less than 10 years- and that divorce is the main cause of mortgage strife- borrowers should beware of fixing for long periods.

Over the next few years we'll see if lender's can introduce long term fixes with no Early Redemption Fees. This would combine the stability of a fixed rate with the flexibility of no lock ins. But this may just be a pipe dream.

For the moment if you want to fix for an extended amount of time, I would recommend a five year fix, such as Nationwide's 5.98% (£599) for new borrowers or 6.08% (£499) for remortgaging.

The Mortgage Provider