What is a 10 year fixed rate mortgage?

A 10 year fixed rate mortgage is one of the longer fixed rate deals you can get in the UK.

With the whole 10 year period, you’ll pay the exact same rate of interest.

This means that your mortgage payments will stay the same for a full 10 years.

Should I get a 10 year fixed rate mortgage?

If you think you’ve found your ‘forever home’, a 10 year fixed could be the right choice for you. There are pros and cons to fixing your mortgage for 10 years.

Pros

The benefits of a 10 year fixed mortgage are that:

  • you’ll know exactly what you need to pay every month

  • if the Bank of England base rate increases it will not affect you

  • you’ll pay one set up fee compared to if you remortgage every 2 or 5 years

  • there are better options as more 10 year fixed deals are being offered

Cons

The disadvantages of a 10 year fixed mortgage are that:

  • interest rates on 10 year fixed mortgages are higher. So repayments will also be higher

  • if the Bank of England base rate drops you will not benefit

  • you may struggle to pay off your mortgage early due to high early repayment charges (ERCs)

  • if your financial situation changes in the 10 year term you could find it hard to afford your mortgage

How to get the best 10 year fixed rate mortgage

Getting a 10 year fixed mortgage is a long-term commitment.

So make sure you’ve looked into what deals are available and what extra costs there might be.

It’s helpful, especially with a 10 year fixed mortgage, to put down a bigger deposit.

A bigger deposit will also help you get the best interest rates and a better deal.

Due to the length of a 10 year fix, there are usually higher interest rates to pay than on a shorter term fix.

Look out for these when comparing different deals.

It’s also important that you consider all costs when getting a 10 year fix.

10 year fixed rate deals could come with higher early repayment charges (ERCs) than 2 or 5 year fixes.

Early repayment charges could cost you thousands of pounds. This could undo any savings you made from a low interest rate.

10 years is a long time, and you may decide you want to move homes.

To avoid large ERCs, make sure you choose a portable mortgage.

This will allow you to transfer your mortgage deal to another property. This could save you thousands on early repayments.

Many mortgages are portable. If you'd like one, tell your mortgage adviser.

What if I want to fix my mortgage for more than 10 years?

Until July 2019, 10 year fixes were the longest fixed rate option for homeowners since 2009.¹

In July 2019, Virgin Money was the first lender to say it would start offering 15 year fixed rate mortgages. They were soon followed by Yorkshire Building Society.

Although these longer fixed mortgages are on offer, interest rates are often higher.

It can cost a lot to get out of a 15 year fix once you’ve signed up for one.

It’s best to consider all your options and where you might want to be in 15 years before starting a long term fix.

Sources

¹ The Guardian - Are 15-year fixed-rate mortgages a price worth paying for security?

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