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Could agreeing a 10 year fixed rate mortgage become the norm?

26th November 2018

Could agreeing a 10 year fixed rate mortgage become the norm?

Did you know?

• 60% of property holders didn’t know that it was conceivable to pick a ten-year  contract

 

• More than 33% of borrowers would think about fixing for a decade

 

• 68% feel that settling their home loan for a long time would provide them with financial security

Rich King Mortgage Broker

Rich King Mortgage Broker- Richard Carried out 10 year research for one of his clients and shared his results

 

 

 

 

 

 

Recent research features the expanding number of property holders choosing a ten-year fixed rate contract in the quest for longer-term financial security.  A view shared by over half (56%) of those surveyed confirmed that they felt that the costs of living would increase in the near future.

 

Brian Murphy, Head of Lending for Mortgage Advice Bureau comments on the findings of the survey, “The number of customers who would consider taking a ten-year fixed-rate deal comes as no surprise, as we’ve seen an increase in the number of lenders bringing new products to market over recent years. Borrowers clearly want to know that they are making a sensible financial decision and that they are safeguarding themselves against potential financial risks such as interest rate changes. Knowing exactly how much your mortgage repayments are going to be for the next decade offers obvious reassurance for consumers, regardless of what happens to the Bank of England base rate, which, as we are already aware, is almost certain to increase at some point this year.”

Brian continues, “Decade-long fixed rates have been available for some time, however there is a lack of consumer awareness of them, as the results of the research suggest. But once potential borrowers discover that this type of product is available, the appeal for some is easy to understand. That’s because the security of a ten-year deal will see certain types of borrowers through to a significant point in their lives, such as perhaps seeing children off to university or reaching retirement age. Alternatively, some borrowers may find that ten years is the length of time they have left on their mortgage, and therefore fixing for the remainder of the term provides an inevitable amount of reassurance.”

But are ten-year deals right for everyone? Brian cautions, “However, for other borrowers, fixing for a decade may not provide the flexibility they need in the shorter term, for example, if they need to move home within the next few years, in which case a ten-year fix may not be right for them. It’s always worth bearing in mind that the majority of fixed-rate deals have significant Early Repayment Charges (ERCs) associated with them, so it’s worth checking the small print and doing your sums to decide what works best for your own circumstances.”

“That aside, what is encouraging to see is that there is an increasing level of prudence and consideration being applied to what is for many their biggest financial commitment. That ten-year fixed-rate products are rising in popularity demonstrates a level of responsibility in the advice being given”

We challenged one of our Bristol based mortgage advisers to carry out research on 10 year fixed rate mortgages. Our favourite deals were from TSB, offering a 10 year fixed rate of 2.44% with a product fee of £995 , Coventry were not far behind offering a rate of 2.490% with a product fee of £999. Both mortgages come with free valuations too. The most expensive mortgage on offer was with Virgin money with a rate of 4.980% with zero initial fees.

10 year research

10 year mortgage research carried out 26/11/2018

 

Book your free meeting to discuss your options. Meetings available 7 days a week, 8am to 10pm.

Meet an Adviser in one of our Bristol offices, or in the comfort of your own home. All Advisers are professionally qualified and authorised by the FCA.

 

 

 

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