fixing over 10 years?

fresher

could anyone please advise me what the risks of fixing over a long period, say 10 years are, besides the obvious of rates falling. also does anyone know what the general feeling is about interest rates, to rise or fall next? whens the next election?


many many thanks for your time

fresher

meanmachine_2

I can accurately predict that, over the next ten years, IRs will rise and fall.

The trick is to lock in at a rate that is affordable to you now.

Forget about election dates - the bank of england is *meant* to be independent.

TangentMan

I would like to second meanmachine's comments.

You need to be comfortable with the payment you will have to pay now and that you will continue to be able to pay it.

You also need to bear in mind that if your circumstances change you may need to pay an Early Repayment Charge to exit that mortgage deal (this is generally the same for any fixed rate but 10 years is obviously a longer time than 2 for circumstances ot change). But you also need to consider the entry fees to another deal in the same scenario.

You should also bear in mind that when people give you advice, whether in a lender's branch or a broker, they will diarise calling you again towards the end of your new fixed rate period (to sell you another one!). So if they seem very keen on you taking a shorter term than you actually want remember that.

Ian_W

To add to TangentMans point about 10yrs being a long time, even if your loan is portable if you move house, or need to raise capital for other purposes, you will be very much at the whim of your lender for any extra borrowing you need during the 10yrs. The alternative is ERCs which will more than wipe-out any benefits you've acheived from a lower fixed rate.
As for guessing interest rates in the future - forget it. The experts can't agree and get it wrong when looking 6 months ahead. Read Martin's article on fixed v variable rates on the mortgage section of the site for the reasons you should/shouldn't consider a fixed.
For me 10yrs is too long, 2yrs is too short. If you can't see yourself moving or circs changing too much fix for 3-5yrs.

BACKFRMTHEEDGE

Your circumstances may change. It's worth checking how much can be overpaid into a 10 year deal. :money:

pennies2pounds_3

I take it you are looking at the woolwich 10 year fix ? . I am also thinking of doing this as you only pay one fee for 10 years ie £495 rather than £400 or more every 2 or 3 years to 'TART'. Seems like a good deal, but like everyone else says you have to be happy paying that ammount (other than overpayments) for this long period. Just to make you feal at ease I am in the same boat too ! pennies2pounds<<<<<<<<<<< quandry :think: