Long-term fixed-rate mortgages offer borrowers the chance to pay at one interest rate for the entire term of the loan ensuring buyers can afford their mortgage payments despite interest rate changes.

Last week, Andrew Griffith, economic secretary to the Treasury met with MPS, the Bank of England and lenders offering fixed-term mortgages of up to 40 years. They discussed several “light-touch regulatory changes” that would be necessary to encourage more lenders to offer long-term mortgages, including relaxing the loan-to-income limit and reducing capital requirements for long-term fixed mortgages.

According to Moneyfacts, those looking to take out a mortgage currently have to be able to afford a lender’s standard variable rate – which is 7.67 per cent on average plus 1 percentage point.

Mr Griffith said he was “definitely interested” in the product, which is popular in countries such as the Netherlands and Denmark, as part of the solution to help more first-time buyers onto the property ladder.

He said: “If a mortgage really is fixed [for the entire term] then the stress tests of affordability aren’t as relevant as there is no chance of payments rising.” The City minister did caveat that discussions were only just beginning.

The Daily Telegraph has reported that high street lenders are warning the Government against the practice, arguing that only a few people will want to fix for the duration of their mortgage term while interest rates continue to rise.