Our Mortgage-Approval Guarantee - We're so confident in our service, we guarantee it - or £100 back* Read more Chevron
Arrow Arrow
Scroll to top
Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: July 15, 2022

Is now the time to take out a TEN-YEAR fixed rate mortgage?

In an effort to protect their funds from rising interest rates, homeowners have sought long-term fixed rate mortgages over the previous year.

In May last year, 2.9% of all mortgage searches were for ten-year fixed rate mortgages. Today, 14.2% of mortgage searches are for ten-year fixed rate mortgages, according to comparison website MoneySupermarket.

Mortgage lenders have raised interest rates following four increases in the Bank of England’s base rate since December last year. As the Bank of England attempts to control soaring inflation, mortgage prices are expected to rise even further in the coming months.

What does this mean for you?

Thousands of mortgage holders are now struggling with greater household expenses. This isn‘t just a problem for a few of us. There is a possibility that extra mortgage costs will put many people into financial difficulty.

Some people may find it difficult to get a new mortgage when their current one expires due to rising living costs. Lenders increasingly utilise affordability calculators to determine whether or not to give a mortgage. If mortgage payments are judged unmanageable due to the borrowers’ other bills, they will not offer them a new fixed rate.

Is it possible to avoid higher rates by committing to a long-term fixed deal?

Longer-term fixed-rate mortgages often have higher interest rates than shorter-term fixed-rate mortgages. However, there isn’t much of a difference between them right now.

According to data researcher Moneyfacts, the average ten-year fixed rate is 3.21%, compared to 3.17% for five-year fixed-rate deals. Lloyds has the lowest ten-year fix at 2.31%.

Long-term fixed rates may also suit some sorts of people. If you value consistency, a long-term fixed rate mortgage may be useful, especially if your circumstances are likely to remain the same for a long time.

Did you know using a broker can help you gain access to 30% more of the mortgage market? You can enquire HERE and one of our specialist brokers will be able to assist you.

There are some things you might want tconsider

In these times, a ten-year fix arrangement may appear to be the ideal choice, but think about everything before making a decision. If you wish to pay off your mortgage or move, you may have to pay hefty early repayment penalties. Some offers allow you to overpay by 10% per year, but not any longer.

Long-term fixes are transferrable in theory, which means you may take them with you if you move. However, doing so basically involves reapplying for the mortgage. Affordability checks are becoming more stringent, and there’s a chance you won’t pass them in the future, especially if your circumstances have altered.

Maybe you‘re already stuck on a fixed-rate?

It can be annoying to be locked into a new arrangement before rates rise, but you still have options. Some lenders allow you to lock in your next loan three to six months before your current one expires.

In some situations, paying the early repayment penalties on a current debt may be worthwhile. These fees are determined on a sliding basis that decreases as you get closer to the end of the term.

We also have brokers in our network who are market specialists, and speaking with one of them may help you speed up the process. You can enquire HERE.

All of the above information is a guide and not advice. For full advice we recommend speaking to an expert broker.

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

Maximise your chances of approval, whatever your situation - Find your perfect mortgage broker

Don't miss out...

Sign up for the latest market news, new lender product information and helpful tips and advice from our experts!

Close icon