UK lender Kensington Mortgages has announced the launch of a range of long-term mortgages, allowing borrowers to fix their rate for up to 40 years.
The ‘Flexi Fixed for Term’ deals allow borrowers to finance their homes for anywhere between 11 to 40 years. They offer “greater borrowing power” as affordability is calculated based on the initial fixed rate rather than the future stressed rate that most other lenders use.
In this article, we outline everything you need to know about the Flexi Fixed for Term mortgages, from loan-to-value (LTV) to the rates on offer, and how they compare to other long-term mortgages on the UK market.
What are Flexi Fixed for Term mortgages?
Flexi Fixed for Term are a selection of mortgages provided by Kensington Mortgages which range from 11 to 40 years and are available to borrowers in the UK. The rates differ depending on the type of borrower, the length of term that they intend to borrow for, and the loan-to-value ratio of the mortgage.
Below is a table which summarises the Flexi Fixed for Term mortgages available:
Summary of Kensington Mortgages Flexi Fixed for Term products
|Mortgage term||Minimum loan amount||Maximum loan amount||LTV||Interest Rate||Purpose||Incentives|
|11-15 years||£75,000||£2,000,000||60%||2.83%||Purchase, Remortgage||None|
|11-15 years||£75,000||£500,000||95%||3.82%||Purchase||Free valuation|
|16-20 years||£75,000||£2,000,000||60%||2.84%||Purchase, Remortgage||None|
|16-20 years||£75,000||£500,000||95%||3.88%||Purchase||Free valuation|
|21-25 years||£75,000||£2,000,000||60%||2.85%||Purchase, Remortgage||None|
|21-25 years||£75,000||£500,000||95%||3.88%||Purchase||Free valuation|
|26-30 years||£75,000||£2,000,000||60%||2.90%||Purchase, Remortgage||None|
|26-30 years||£75,000||£500,000||95%||3.92%||Purchase||Free valuation|
|31-35 years||£75,000||£2,000,000||60%||3.16%||Purchase, Remortgage||None|
|31-35 years||£75,000||£500,000||95%||4.15%||Purchase||Free valuation|
|36-40 years||£75,000||£2,000,000||60%||3.34%||Purchase, Remortgage||None|
|36-40 years||£75,000||£500,000||95%||4.30%||Purchase||Free valuation|
Who are Flexi Fixed for Term mortgages aimed at?
In order to be eligible for a Flexi Fixed for Term mortgage, you must be:
- Either employed or self-employed
- A first-time buyer, home mover or remortgager
- Buying in England, Wales or mainland Scotland
There is currently no buy-to-let option. The LTV for a Flexi Fixed for Term mortgage differs depending on the category that each borrower belongs to, with first-time buyers able to secure 60-95% LTV deals while people remortgaging can get mortgages at 60-85% LTV.
How much do Flexi Fixed for Term mortgages cost?
The interest rate for a Flexi Fixed for Term mortgage differs depending on the term and the amount borrowed and ranges from 2.83%-4.30%. Below is a summary of the minimum and maximum interest rates for each term.
- 11-15 years: 2.83-3.82%
- 16-20 years: 2.84-3.88%
- 21-25 years: 2.85-3.88%
- 26-30 years: 2.90-3.92%
- 31-35 years: 3.16-4.15%
- 36-40 years: 3.34-4.30%
In addition, some Flexi Fixed for Term mortgages come with completion fees of £1,499 in exchange for slightly lower interest rates. Higher LTV Flexi Fixed for Term purchase mortgages come with free valuations, and the remortgage-only deals come with free valuations and no legal fees.
There are no early repayment charges on a Flexi Fixed for Term mortgage if any of the following apply:
- The property is sold to repay the loan in full
- The loan is repaid in full using the borrower’s own funds (e.g. savings or income)
- If any individual named as a borrower dies during the mortgage term
- Overpayments up to 10% (of the original loan) per calendar year
If the loan is repaid using funds borrowed from another lender and secured against the property, the early repayment charge is between 2.00%-7.00%. The highest ERC of 7% is payable on mortgages with fixed terms of between 11 and 15 years when it is paid between years 1-5 of the mortgage. The lowest ERC of 2% is payable in the final 5 years of each mortgage term.
How do Flexi Fixed for Term mortgages compare to other long-term fixed-rate mortgages?
If you’re looking for an alternative long-term fixed-rate mortgage, Habito One* offers similar deals from between 10 to 40 years for first-time buyers, home movers and remortgagers.
What sets Habito One’s mortgages apart from Kensington Mortgages Flexi Fixed for Term mortgages is that they are considerably more flexible, allowing borrowers to pay off the mortgage early - either in a lump sum or overpayments - or even exit the deal entirely without paying any financial penalties.
However, this flexibility comes at a cost, as Habito One’s mortgages have consistently higher interest rates than their Flexi Fixed for Term equivalents. For example, the 36-40 year 90% LTV Habito One mortgage has an interest rate of 5.30% compared to the Flexi Fixed for Term 36-40 year 90% LTV mortgage, which has an interest rate of 4.09%.
In addition, Flexi Fixed for Term mortgages are available with LTVs of up to 95%, whereas Habito One’s only go up to 90%. Habito One’s mortgages also have a higher completion fee of £1,995 compared to the standard £1,499 on Flexi Fixed for Term mortgages.
|Flexi Fixed for Term||Habito One|
|Available for||First-time buyers, home movers and remortgagers||First-time buyers, home movers and remortgagers|
|Early repayment charge||2.00%-7.00%||N/A|
If you’re looking for more information on long-term fixed-rate mortgages, head over to our article “Which are the best long-term fixed rate mortgages – and should you get one?”.