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As Brexit-driven political instability continues, the likelihood of a general election and the arrival of a Jeremy Corbyn administration appears to be increasing by the day.
This is likely to bring about sweeping reforms to the banking sector, dramatic changes to housing policy and potentially higher interest rates.
Homeowners who have enjoyed a decade of rock-bottom rates are becoming concerned that the supply of cheap mortgages may soon dry up.
John Charcol, a mortgage broker, said it had seen a growing number of borrowers looking to protect themselves against the possibility of rising rates.
The firm’s Nick Morrey said taking out a 10-year fixed-rate mortgage with a break clause after five years was the best solution.
He called this the “Corbyn mortgage hedge”, although it can be used to safeguard against any event that borrowers fear may lead to a rate rise.
Mr Morrey said the best option was a 10-year loan from Coventry Building Society. This offers a fixed interest rate of 2.39pc for those with a deposit of 35pc.
A £999 fee applies to the deal, which is available for both purchase and remortgage customers. The rate is fixed until June 2029 but, crucially, borrowers can move without penalties after five years.
Mr Morrey said: “We are seeing borrowers worried about financial security. The best deals offer a fixed rate with the chance to pull out. “The rates for 10-year deals are higher than for shorter terms. It just depends whether people want to pay a little extra for peace of mind.”
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