At launch, GMAC, part of the General Motors Group, said the mortgage aimed to make long-term fixed rates more attractive to UK borrowers and bridge the gap between ‘average incomes and average house prices’.
Offered at 5.95 per cent, the product allowed borrowers to mix in a penalty-free variable rate tracker in five different combinations and borrow up to five times income.
GMAC refused to reveal how many mortgages were sold, despite reports that it issued only £5 million in lending on the product.
Jeff Knight, head of marketing services, said: “We went in with our eyes wide open and the reaction could have been anything from no sales at all to really taking off. But, the week before last, when swap rates went up, the feedback we got was that 5.95 per cent was relatively expensive.”
Jennifer Holloway, head of corporate communications at Skipton Building Society, which offers three-, five- and ten-year fixed rates, said: “When the Miles Report came out in March, our ten-year rate offered at 5.99 per cent had only received 20 or so applications. Two huge lenders like the Halifax and the Woolwich were also quoted at the same time as receiving only 200 and 100 applications for their ten-year products, which illustrates the fact that even ten year-fixes are not going to be big sellers.”
Richard Sexton, national business development manager at chartered surveyor e.surv, said: “The Miles Report made a statement of intent which many people have yet to be convinced by. People have got into a culture of reviewing their mortgages every two years and it’s going to take a lot to change that.”
