A 10-year fixed-rate mortgage can seem a significant commitment. 

However, with rates reducing significantly, it is now entirely possible to receive some of the most competitive rates around – but is now the time to start thinking long-term?  And are fixed-term mortgages the right choice for you?  Especially a ten-year fixed. 

To answer these questions and more, a mortgage broker will be able to provide you with a range of options, all based on your long-term plans, i.e., how long are you planning on staying in the property? Are you in a position to repay large balances early?  Could you be eligible for better deals in the short term if your circumstances change? 

This is why your mortgage broker will consider fixed rates in comparison with others in the market.  Presenting you with all the options and most importantly the costs associated with each. 

Is a 10-year fixed-rate mortgage competitive in the long run? 

Unfortunately, we can’t predict the future, and the fixed rate on offer will be based on predictions and expectations, i.e., what we expect to see from interest rates over the term in question alongside what profit the Bank will expect. 

Currently, in the UK, interest rates are at an all-time low, with Banks predicting a much longer period of low-interest rates to continue, making fixed-term deals considerably competitive. 

This means that most Banks don’t expect the average interest rates over the fixed period to be higher than the role they are offering you. 

Who would benefit from a 10-year mortgage? 

  • Can you be confident in securing another short-term competitive rate? 
  • Are you worried about costs and repayments? 
  • Do your circumstances indicate variable rates could be of more benefit? 
  • Will early repayment penalties cause an issue long-term? 

The answers to these questions will primarily come down to your circumstances, i.e., are you likely to receive a promotion imminently?  Are you planning work to the property that decreases your loan to value?  Or is the term good value for money for the additional security they provide? 

An independent mortgage advisor will discuss this with you further and provide clarity on if a 10-year fixed term is right for you. 

It’s essential to understand your options and know what’s available to make the most informed decision.  At Mortgage Assistants, we’re here to help. 

If you’re interested in the mortgage deals currently available, call us on XXXX. 

House mortgages 

Previously, two-year mortgage deals have always been the most popular, but with interest rates at an all-time low, longer fixes are increasing in popularity. 

Now, those on a long-term fixed could be at an advantage. 

Benefits of a 10-year fixed-rate mortgage 

You have complete security for ten years, knowing exactly what the rate will be and the amount you will be paying each month. 

You avoid switching fees every two years – Over ten years, only taking out two-year fixed deals could mean that you’re paying much more over the term.  

You avoid increases in rates – if you know interest is set to rise in the coming years, a long-term fixed product can provide you with confidence that you’re set on prices. 

You’re protected if lending criteria changes – if the affordability criteria changes, this could affect your opportunity to re-mortgage and receive a more competitive rate. 

You have complete certainty about what you’re paying for the next ten years. 

You avoid remortgaging fees for ten years. 

You won’t be affected by changes in house prices – a longer-term fix will protect you against short-term market dips.  (However, the opposite is also true, if house prices rise, you won’t be able to benefit from this). 

Disadvantages of a 10-year home mortgage 

  • Your monthly payments could be higher in the beginning. 
  • You might miss out on even lower rates. 
  • Check the small print on penalties if you were to move to a new house. 
  • Check any additional charges if you want to pay off your mortgage earlier than planned. 
  • If you have a high loan to value, you could end up paying more than you’re tied in regardless of potential better and more competitive rates that could come your way. 

Often, five years can feel like good middle ground.  However, if you’re looking for home loans in the UK and you think interest rates could rise sharply, ten-year mortgages could be a perfect choice. 

Today, with interest rates at an all-time low could now be the perfect opportunity to immerse yourself in your home of mortgages and review your mortgage product today. 

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