10 year fixed rate mortgages

alexchegwin

I have been looking at 10 year fixed rate mortgages.

Their interest rates do not seem much higher than those of a year fixed rate. I forsee a substantial rise in interest rates at some point over the next decade so choosing a 10 year fixed seems prudent.

just wondering what other people think about these ?

thanks

smcqis

alot of things to consider not just the interest rate, for example, any fees? any overpayments? is the mortgage transferable if you want to mve house etc

Alot of things can happen in 10 years, curiously whats the best rate your finding and whats your LTV

alfiesmum

We have a ten year mortgage fixed rate. It's good for long term financial planning, but now that we're planning on paying it off in 6 years total, it's a bit hefty on the ERC's. So look at it from every angle.

Little_Mama

alfiesmum wrote: »

We have a ten year mortgage fixed rate. It's good for long term financial planning, but now that we're planning on paying it off in 6 years total, it's a bit hefty on the ERC's. So look at it from every angle.

I may be being very naive but could you pay off everything bar £1 until the 10 years are up? Therefore not having to pay the ERCs. You'd have to check if this was possible.

LM

Little_Mama

alexchegwin wrote: »

I have been looking at 10 year fixed rate mortgages.

Their interest rates do not seem much higher than those of a year fixed rate. I forsee a substantial rise in interest rates at some point over the next decade so choosing a 10 year fixed seems prudent.

just wondering what other people think about these ?

thanks

We had a 10 year fix which was on a good rate and over the term we did well with it, however, about half way through we started to get info through on FD's Smart (I think that was the name of their offset at the time) mortgage and the ERCs were prohibitive. All it did was make us very annoyed that we couldn't afford to change to a product which very much more suited our needs and aims.....we had to wait another 5 years!

You really need to think it through, look at the nature of the mortgage, what it allows, penalties etc like smcqis says. Personally if I was doing it all again I'd have looked for a shorter fix as the markets changed and a more suitable product came onto the market for us.

LM

Batchy

I think rates are getting more detached from BOE interest rates,

For example

years ago, you could get a discount on BOE ... now its a min 2% extra... if they increase rates by 2% maybe banks would go back to .5% above base etc... 10 years fixes are not worth what they once were. good luck in whatever you decide!

alexchegwin

Thanks for all your repsonses... I have a 50k mortgage on a 120k house.

I think some more research is needed.. I would agree that the rates offered a well above the basic rate... I suppose I am concerned that there may be a interest rate hike at some point perhaps to previous highs and wanted to protect myself.

Then again I am also wanting to overpay so perhaps the and get my mortgage down quickly so perhaps this would mitigate any potential loss.

Can be difficult to rationlise so many affecting factors.

Pincher

£50k on £120 is 41% LTV, so you qualify for the Santander 40% Desposit (60% LTV) 4.60% five year fix, £995 fee.

I cannot see how you can lose on that one, considering the mass of people paying 4.59% on a variable right now.

getmore4less

alexchegwin wrote: »

Thanks for all your repsonses... I have a 50k mortgage on a 120k house.

I think some more research is needed.. I would agree that the rates offered a well above the basic rate... I suppose I am concerned that there may be a interest rate hike at some point perhaps to previous highs and wanted to protect myself.

Then again I am also wanting to overpay so perhaps the and get my mortgage down quickly so perhaps this would mitigate any potential loss.

Can be difficult to rationlise so many affecting factors.

if you do the numbers for shorter terms like 2-3 years the low cost trackers win over fixes if you think rates are staying lowish < 6% for a couple of years.

The overpayments give a massive hedge against rate rises.

With your LTV you could look at the FD tracker 2.39% offset 2.59% £499 fee.

pay these as if you were on a higher rate fix and you will get ahead.

I can do the numbers( but will have to be later/tommorow) if you give us the rate fees for an alternative.