Fixing your mortgage rate for a quarter of a century could become more popular when Manchester building society launches the first 25-year fix with no redemption penalties tomorrow. The government is keen for homeowners to take on long-term fixes because it believes they will help stabilise the housing market.

However, they’ve never been popular because rates tend to be higher than on shorter-term deals, and penalties usually apply, making them expensive to get out of.

In a survey for The Sunday Times by L&C Mortgages, a broker, only 4 per cent of people said they’d be prepared to fix their mortgage payments for 25 years because most borrowers don’t want to be tied into a deal for that long.

Several lenders have 25-year loans that only tie people in for 10 years. Nationwide and Halifax, for example, both offer 25-year fixes at 6.39 per cent, and an early repayment charge of 3 per cent only applies if you redeem them within the first decade.

Kent Reliance has the lowest 25-year rate at 5.98 per cent, but you have to accept penalties throughout the term.

But Manchester’s product, available from tomorrow only through L&C Mortgages, overcomes the trade-off between rate and flexibility.

Offered on loans up to 85 per cent of a property’s value, Manchester’s deal charges 5.99 per cent, and borrowers can get out penalty-free at any time.

The arrangement fee is high, though, at 2 per cent of the loan size, although you get £500 cashback on completion, and if you still have the mortgage after 10 years you get 2 per cent of the outstanding loan back. You get another 2 per cent returned after 20 years.

The rates on 25-year deals are often about one percentage point higher than those on shorter-term products.

However, there is currently little difference in the rates on long and short-term fixes because the money markets believe Bank rate at 5.75 per cent is close to a peak and will remain at current levels, or fall, over the longer term.

The best five-year fix is from Giraffe, part of Bristol & West, at 5.88 per cent. Giraffe also has the best two-year rate at 5.73 per cent. Both products have £999 arrangement fees. The fact you can lock in for longer without having to accept a significantly higher rate may therefore be attractive.

But not everyone thinks now is the best time to be fixing your mortgage for the long-term.

Ray Boulger at John Charcol,a broker, said: “The time to take a long-term fixed rate is when interest rates are at a floor, and that isn’t now.”

If you think rates are at or near their peak, you may prefer a vari-able-rate deal.

Halifax has a two-year discount at 5.39 per cent, with a £1,499 arrangement fee.