Long-term mortgage loans 'may not be the answer'Long-term mortgage loans 'may not be the answer'
Government plans to issue proposals regarding the supply of long-term fixed-rate mortgage loans has been described by one organisation as "a rather sweeping solution" to the housing crisis.
According to Moneyfacts, the current affordability problems can be solved by this type of loan as it only represents a "very small fraction" of the overall fixed-rate market.
In fact, the long-term fixed-rate loan sector of the market is "still in its infancy" and can be something of a gamble.
"While you may feel smug as rates rise, if they drop you may be kicking yourself, especially if this persists over a long period of time.
"We must remember that historically interest rates are still quite low, but a lot can happen in 25 or 30 years."
The government's policy announcement comes after a mortgage review set up by Gordon Brown when he was chancellor suggested that the trend for cheap short-term loans contributes to the boom-bust cycle. 