10-year fixed rate product numbers soar amid uncertainty

10-year fixed rate mortgage products have increased significantly over the past five years, according to data from Moneyfacts.

Related topics:  Mortgages
Rozi Jones
22nd January 2019
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"In times of uncertainty, a decade-long fixed mortgage could be a safe-haven for borrowers looking to secure their mortgage payments"

There are now 150 10-year fixes on the market, a drastic increase from the 16 products available in January 2014 and 89 products on offer 12 months ago.

Over the past five years, the average rate has also fallen by 1.56% to stand at 3.05%.

Darren Cook, finance expert at Moneyfacts, 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.”

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