Is new 15-year mortgage the answer to Brexit concerns?

Homeowners now have the option to lock in their mortgage for 15 years, shielding them from potential economic turbulence.

The deal, the longest fixed rate on the market, was launched by Virgin Money this week. It offers rates as low as 2.55pc.

Andrew Asaam of Virgin Money said: “Fixed rates of longer than 10 years are not generally available but, given the economic backdrop, they can be a perfect choice for borrowers who are looking for longer interest rate certainty.” Yet anyone who wants to quit the deal early will pay a punitive penalty: 8pc if they leave within the first five years, then a gradually reducing amount.

You can borrow up to 95pc of the value of your home, although the best rates (2.55pc with a £995 fee or 2.89pc with no fee) are available only to those with a 35pc deposit.

The mortgage offers rates similar to those on 10-year fixes – it is just 0.26 percentage points more expensive than the best 10-year deal. Chris Sykes of Private Finance, a mortgage broker, said borrowers could enjoy “an additional five years of peace of mind for little additional cost”.

Yet Aaron Strutt of Trinity Financial, a rival firm, warned homeowners that locking in to a 15-year mortgage

was a “significant commitment” that wouldn’t be suitable for everyone.

He said the mortgage’s long term could prove a particular problem for young families, who move more often: someone who borrowed £200,000 would pay a penalty of £16,000 to leave within the first five years. Meanwhile, those with a bigger mortgage will find the higher rates for the longer-term fix translate into heftier monthly repayments.

“But for older borrowers this deal could be very attractive,” Mr Strutt said. “You can stay in your home for years, safe in the knowledge you’ll be able to ride out the Brexit storm.”