Average 10-year fixed rate mortgages fall to 3.05%
The average 10-year fixed mortgage rate has dropped significantly over the past five years, to just 3.05%, according to Moneyfacts.co.uk.
In 2014 10-year fixes averaged 4.61% and have since fallen by 1.56%.
The deals have become popular with borrowers amid political and economic uncertainty and, although typically more expensive than two-year and five-year fixed rates, 10-year deals offer long-term payment security.
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.”
10-fold boost in products
There is now far more choice of 10-year fixed rates than just five years ago, added the financial information provider. In January 2014 there were 16 10-year fixes on the market, compared to 150 today.
However, if you fix your mortgage rate for 10 years, remember you are making a long-term financial commitment, which could be expensive to escape if you need to remortgage, move house or sell up down the line.
Cook explained: “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.
“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.”