UK 10 Year Fixed Rate Mortgages Market

By: MoneyFacts

Borrowers weighing up their mortgage options at the start of the year may find that the typically favoured two and five-year fixed mortgage rates are low compared to recent years. However, amid heightened concern about future Bank of England base rate rises, many could be seeking even further security with their monthly payments.

The latest research from Moneyfacts.co.uk reveals that now could be the time to consider longer-term fixed deals, as the average 10-year fixed mortgage rate has decreased significantly over the past five years, dropping 1.56% to stand at 3.05% today. Not only this but the availability of longer-term fixed mortgages has increased to stand at nearly 10 times what it was in January 2014.

Darren Cook, Finance Expert at Moneyfacts.co.uk, said:

“In times of uncertainty, a decade-long fixed mortgage could be a safe-haven for borrowers looking to secure their mortgage payments over the longer-term. As consumers prepare themselves for another potential base rate rise this year, their thoughts will be on how to safeguard themselves from any increase in interest rates.

“Meanwhile, the availability of 10-year fixed rate products has increased by 134 over the past five years and the increase in competition as a result of this has seen the average rate fall from 4.61% to 3.05% during this period.

“Despite lenders in the longer-term market demonstrating competitiveness and variety to attract borrowers’ attention, it’s unavoidable that they must factor in longer-term fluctuations and higher SWAP rates. This means 10-year fixed rates are still typically higher than those found in the more popular two and five-year fixed rate markets.

“Borrowers must also be aware that 10-year fixed rate mortgages are often accompanied by hefty redemption penalties, which require a borrower to be tied into the deal for the full length of the term. However, currently 84% of the 10-year fixed rate deals on the market offer a porting option for those who wish to move home during this period, resuming the mortgage on the same terms with the new property.

“A 10-year fixed rate mortgage will need a lot of consideration, with borrowers looking at all the options to make sure this is the right choice for their individual circumstances. But perhaps, given the current uncertainty, now is the time to make a long-term commitment.”

moneyfacts.co.uk is a financial product price comparison site, launched in 2000, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, there is no commercial influence on the way moneyfacts.co.uk ranks products, showing consumers a true picture of the best products based on the criteria they select. The site also provides informative guides and covers the latest consumer finance news, as well as offering a weekly newsletter.

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