The rate is fixed for any term up to a maximum of 30 years. It is available for both purchases and remortgages and carries an arrangement fee of 2%. Borrowers will receive a 2% loyalty bonus in year 10 and again in year 20.
The government recently announced its intention to try and boost the supply of longer-term fixed rate mortgages. However, demand is low in the current market mainly because borrowers don’t like to be tied in to a mortgage for the long-term.
Last month, L&C surveyed 1,200 of its customers to find out their views on long-term fixed rates. When asked if they would consider a 25-year fixed rate, 48% of them said they would. However, 68% of those said they would be able to stomach ERCs for no more than five years.
Commenting on the deal, James Cotton, mortgage specialist at L&C, said: “Our recent survey shows that whilst borrowers are attracted by the security that long-term fixed rates can offer, the ERCs that go with them are the biggest turn off. This new deal solves that problem by offering both long-term security and the flexibility that comes with having no ERCs."
